TIGA, the network for games developers and digital publishers, said today that the Government should look to increase the amount of money that a company can raise via the Seed Enterprise Investment Scheme (SEIS) from £150,000 to £200,000.
Creative businesses, including games developers, find it relatively difficult to access debt, bonds and equity finance. This is primarily because games development businesses typically have relatively few assets and are comparatively young with little evidence of a financial track record.
The SEIS can help SMEs access capital because it provides tax efficient benefits to individuals and encourages investment in small and early stage start-up businesses in the UK. Over the last couple of years, the SEIS scheme has successfully supported the funding of many new start-up games studios and entrepreneurs across a range of games platforms. Yet the development and marketing budgets required to make internationally competitive games are on the rise as game devices such as mobile phones and tablets become increasingly technically advanced, rivalling game console quality, and consumer expectations of a mobile game experience get higher.
Dr Richard Wilson, TIGA CEO, said:
“Increasing the SEIS cap from £150,000 to £200,000 would help ensure that new studios can continue to gain from the SEIS scheme (and get access to early funding which simply is not readily available elsewhere), whilst ensuring the projects they create are good enough to compete in a challenging marketplace. The Autumn Statement provides a good opportunity for the Government to signal its intention to enhance the SEIS still further.”
Patrick O’Luanaigh, CEO nDreams Ltd and TIGA Board member, said:
“I have seen the SEIS scheme incubate many new game development studios that would have struggled to attract investment without it and create some great new games that would not have happened otherwise. However, the cost of creating a competitive game for platforms like iOS and Android is increasing each year, and raising the SEIS cap will help studios gain vital investment whilst making sure they are able to deliver competitive quality titles.”
Notes to editors:
- TIGA is network for games developers and digital publishers. We are the trade association representing the UK video game industry. We help developers and digital publishers build successful studios, network with the right people, save money and access professional business advice. We also have traditional publishers, outsourcing companies, technology businesses and universities amongst our membership.
TIGA is 90% funded by independent UK businesses. 80% of our board members are developers and/or from UK owned businesses, and 50% of our board are UK business owners themselves. Since 2010, TIGA has won 17 business awards.
TIGA focuses on three sets of activities:
- Political representation
- Media representation
- Business services
This enhances the competitiveness of our members by providing benefits that make a material difference to their businesses, including a reduction in costs and improved commercial opportunities. It also means our members’ voices are heard in the corridors of power and positively represented in national, broadcast and UK video game trade media.
Get in touch:
Tel: 0845 468 2330
Email: info@tiga.org
Web: www.tiga.org
Twitter: www.twitter.com/tigamovement
Facebook: www.facebook.com/TIGAMovement
LinkedIn: http://www.linkedin.com/company/tiga
For further information, you can also contact: Dr Richard Wilson, TIGA CEO on: 07875 939 643, or email: richard.wilson@tiga.org
Drew Field, TIGA Communications Director on: 07720 643 344, or email drew.field@tiga.org
- For more information TIGA’s proposals for the Autumn Statement, see: https://www.tiga.org/news/strengthening-the-uk-games-industry-tigas-proposals-for-the-2014-prebudget-report
- The SEIS, which was introduced in 2012, currently operates under the following parameters:
- any one company can raise no more than £150,000 in total via SEIS investment in any three-year period;
- SEIS investors can invest up to £100,000 in a single tax year which can be spread over a number of companies;
- Investors cannot control the company receiving their capital and have more than a 30% stake in the company in which they invest;
- investors can receive up to 50% income tax relief in the tax year the investment is made and all or part of the investment made in one year may be treated as made in the previous year, subject to the overall limit for that year;
- the business company must carry one or more qualifying trades and have a permanent establishment in the UK ;
- There is no charge to capital gains tax if shares on which SEIS income tax relief has been given are disposed of at a profit after a retention period of three years, If the disposal results in a loss, relief is available for the loss whether the disposal is within or outside the retention period;
- individuals may claim capital gains reinvestment relief where they realise capital gains on disposals of assets from 2012-13 onwards and in the same tax year make investmenmts that qualify for, and they claim, SEIS income tax relief. For 2013-14 onwards the relief applies to half the qualifying reinvestment amount ;
- the company must have fewer than 25 full-time equivalent employees (if the company is the parent company of a group, that figure limit applies to the whole group)
- the company’s trade must be no more than two years old;
the company must have assets of no more than £200,000; and the company has to trade in an approved sector – generally not in finance or investment http://www.seis.co.uk/