New data included in the British Film Institute’s (BFI) full year report for 2021 underlines the importance of Video Games Tax Relief (VGTR) to small games development projects.
- Most video games being developed and receiving final certification are small budget projects.
- The median budgets for final video game cultural test certifications in 2021 was £199,500.
- In 2021, 242 video games received final certification (20 fewer than in 2020).
- UK spend was £337 million and total budget £400 million (down from 2020’s figures of £419 million and £455 million respectively).
- 210 video games received interim certification (the largest number since the tax relief was introduced.
- The projects had an expected UK spend of £1.04 billion and a total budget of £1.12 billion, decreases from the 2020 record values of £1.05 billion and £1.66 billion respectively.
- However, the UK spend as a percentage of total budget for 2021 was the second highest on record (93%) and a substantial increase on the 63% from 2020.
The chart below shows the number of cultural test final certification for video games between 2017 and 2021.
The BFI noted that 2019 was an anomaly year ‘caused by a small number of very high budget projects that received final certification in the year’.
Video Games Tax Relief is available on qualifying UK/EEA production expenditure on the lower of either 80% of the total core expenditure or the actual UK/EEA core expenditure incurred. The BFI certifies video games for this purpose.