TIGA, the network for games developers and digital publishers and the trade association representing the video games industry, has responded to the recent publication of the ‘Benefits of Brexit’ policy paper.
As an export-focused industry, TIGA welcomes the Government focus on boosting exports and exploring new trade deals across the world. However, TIGA also would like to see the following issues addressed and prioritised as the Government continues to seize the opportunities of Brexit.
Increasing VGTR: the UK must take advantage of the greater freedoms regarding state aid by increasing the rate of Video Games Tax Relief (VGTR) to 32%. VGTR enables the UK to compete on a level playing field against our overseas competitors. Other jurisdictions have been taking steps to enhance their business environments and tax relief in other countries is more generous than it is in the UK. For example, Ireland has recently announced it will introduce a higher rate of video games tax relief at 32%. As Ireland shares a common language and is geographically close, the UK must take advantage of the post-Brexit subsidy control system and act quickly to introduce a higher rate of VGTR here.
Video Games Investment Fund: Difficulty accessing capital has consistently been one of the top factors holding back many games developers in the UK and games studios often find it difficult to raise capital for growth. The VGIF would provide funding to start-ups and small studios on a pound for pound matched funding basis up to a maximum of £500,000. A VGIF would stimulate innovation and encourage the generation and retention of original IP. The UK can capitalise on our industry’s strong position by improving access to finance for small and medium-sized studios through the VGIF.
Maintaining the EU-UK data adequacy agreement: Games development often involves the use of a large amount of personal and non-personal data, therefore the free flow of data between the UK and EU is important to many games businesses. The maintenance of an adequacy agreement on data protection will prevent damage to the UK’s thriving video games sector and avoid the need for businesses to meet divergent compliance regimes in both the UK and the EU. Maintaining the EU-UK data adequacy agreement will also help the UK video games sector to bolster trade with the EU, boost innovation and investment, and protect the smaller firms which make up a large proportion of British developers.
New Subsidy control system: In March 2021, TIGA submitted a comprehensive response to the Department for Business, Energy and Industrial Strategy’s consultation, Subsidy control: designing a new approach for the UK. In this response, TIGA called upon the Government to take the opportunity afforded by the establishment of a new subsidy control system to enable subsidy providers to move nimbly, address market failures and remove obstacles that inhibit the growth of our high technology industries.