On Monday 28 February, the Government answered a Written Question on increasing the rate of VGTR to 32%, following the announcement that Ireland plans to introduce a higher rate of Video Games Tax Relief. The question was asked by Justin Tomlinson, Conservative MP for North Swindon. The Government response acknowledged the importance of VGTR to the video games industry and the Government also stated that all tax reliefs are kept under review.
See the full answer below.
Video Games: Tax Allowances
HM Treasury
28 February 2022
Justin Tomlinson: To ask the Chancellor of the Exchequer, what assessment he has made of the impact on Ireland’s competitiveness of its higher rate of video games tax relief at 32 per cent; and whether he has plans to accept the recommendation of The Independent Game Developers’ Association to increase the rate of video games tax relief in the UK.
Lucy Frazer – Financial Secretary (HM Treasury): The Government recognises the valuable economic and cultural contribution of the video games industry. The Video Games Tax Relief (VGTR) has supported £4.4 billion of UK expenditure on 1,640 games since its introduction in 2014.
The Government regularly receives proposals for changes to tax reliefs. When considering changes, the Government must ensure they provide support to businesses in a fair way and that taxpayer money is effectively targeted. An uplift in the rate of VGTR is not currently under consideration. However, the Government keeps all tax reliefs under review.