TIGA, the trade association representing the UK video games industry, said today that the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are important measures that help companies access finance. The Government should also examine the case for a Games Investment Fund. TIGA made the comments following the Treasury’s reference to a recently published review on the effectiveness of the EIS and SEIS.
The EIS and SEIS are UK Government schemes designed to help smaller higher-risk trading companies raise finance by offering a range of tax relief to investors who purchase new shares in those companies.
HMRC found that in 2015-16, 2,360 companies received investment through SEIS and £180 million of funds were raised. This is very similar to 2014-15, when 2,365 companies raised a total of £180 million. Meanwhile, under the EIS, companies raised a total of £1,888 million of funds in 2015-16, compared to £1,929 million the previous year.[1]
In total, 26,355 companies have participated in EIS, which has been operating since it was launched in 1993, while 6,665 have participated in in SEIS since its 2012 inception.
Dr Richard Wilson OBE, Chief Executive of TIGA, said:
“EIS and SEIS are important measures that help companies access finance and it is great to see their impact on the UK start-up scene. Creative businesses, including games development studios, find it relatively difficult to access finance so incentives such as EIS and SEIS are important for our industry.
“However, access to finance remains the most common challenge for many video games businesses. Despite schemes such as EIS and SEIS, almost two-fifths of respondents to TIGA’s 2018 Business Opinion Survey said that access to finance was holding back their business.
“This is why TIGA has called for the Government to examine the case for introducing a Video Games Investment Fund, to support the long-term growth of the video games industry. The industry currently adds £1.5 billion to GDP every year. If we can improve studios’ access to finance then our industry will create more jobs, invest more capital and make an even bigger contribution to UK GDP.”
For information on TIGA’s proposed Video Games Investment Fund, see: https://tiga.org/news/tiga-calls-for-the-launch-of-a-games-investment-fund-2
The full Written Answer is available below:
Enterprise Investment Scheme and Seed Enterprise Investment Scheme
HM Treasury
Mr Alister Jack (Dumfries and Galloway) (Con): To ask Mr Chancellor of the Exchequer, what recent assessment his Department has made of the effectiveness of the (a) Enterprise Investment Scheme and the (b) Seed Enterprise Investment Scheme.
Mel Stride: HM Treasury recently conducted a thorough assessment of the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) as part of the Patient Capital Review (PCR).
The PCR consultation Financing Growth in Innovative Firms along with the government response, published at Autumn Budget 2017, can be accessed here:
https://www.gov.uk/government/consultations/financing-growth-in-innovative-firms
Mr Alister Jack: To ask Mr Chancellor of the Exchequer, how many businesses have participated in the Enterprise Investment Scheme and the Seed Enterprise Investment Scheme since the inception of those programmes.
Mel Stride: HMRC publishes reports on the number of companies that have participated in the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS).
Since the inception of these schemes, 26,355 companies have participated in EIS and 6,665 companies in SEIS.
Further information about the take-up of these schemes up to the end of 2015/16 (the most recent figures) can be found here: https://www.gov.uk/government/statistics/enterprise-investment-scheme-seed-enterprise-investment-scheme-and-social-investment-tax-relief-statistics-october-2017