TIGA, the trade association representing the UK video games industry, has proposed enhancing the Video Games Expenditure Credit (VGEC) in its submission to the Government’s Spending Review.
TIGA stated in its submission to HM Treasury, that the single most important measure that the Government can take to drive investment, employment and studio growth in the UK is to enhance VGEC. In turn, a successful video games industry will contribute to the Government’s objective of securing the highest sustained growth in the G7.
Video Games Tax Relief (VGTR) was introduced in 2014 partly to enable our sector to compete on a more level playing field against our international competitors who benefited from tax credits. VGEC has been available to claim since 1st January 2024. VGTR will be phased out by April 2027. VGTR/VGEC has successfully driven average annual studio staff headcount growth of 9.5 per cent (2014-May 2024). Many of our competitors in countries including France, Canada and Australia now have more generous tax incentives for games production than the UK.
TIGA recommends that the Government should consider the following three proposals to drive growth across the UK video games development sector.
- Raise the rate of VGEC from 34 per cent to 39 per cent.
- Raise qualifying expenditure from 80 per cent to 100 per cent.
- Introduce an Independent Games Tax Credit (IGTC) with a rate of 53 per cent on 80 per cent of qualifying costs, on budgets for games of up to £23.5 million, in line with the existing Independent Film Tax Credit.
Enhancing VGEC would help to keep the UK a leading location for game development globally, boost investment, create high skilled jobs, and encourage the growth of games clusters throughout the UK. An IGTC would be especially beneficial. It would incentivise more games production by smaller studios in the UK and encourage British developers to stay in the UK rather than relocate to countries with more tax incentives. It would also increase the GVA of the sector and hence growth, and higher tax revenue in the future as the sector expands and smaller studios scale up and grow. In addition it would make the UK’s tax relief for the video games sector more competitive vis-à-vis other jurisdictions, like Canada.
TIGA also emphasised in its submission the importance of the UK Games Fund’s (UKGF) Prototype Fund and Content Fund, which are run by the UK Games Talent and Finance Community Interest Company. These Funds help studios to access finance.
The Government announced further support for the UK Games Fund on 17th January 2025. TIGA strongly supports this action. The Government should continue to retain and expand support for the UK Games Fund’s Protype Fund and Content Fund (and Tranzfuser programme). This will help studios to bridge the earliest stages of the finance gap, develop new IP, secure investment and grow.
TIGA CEO Dr Richard Wilson OBE said: “The UK video games industry can make an important contribution to economic growth. Our sector provides high skilled employment, is export focused and supports economic activity in clusters across the UK. VGEC is a crucial measure for attracting investment, creating jobs, and fostering innovation. TIGA’s proposals for VGEC and for an IGTC can drive growth in the UK games industry and support the Government’s objective of securing the highest sustained growth in the G7.”
Jason Kingsley CBE, TIGA Chairman and CEO and Creative Director at Rebellion, said: “TIGA is the only organisation to have consistently argued for VGTR and was the first to propose an IGTC. Our proposals would incentivise the development of new games, enable more studios to scale-up, encourage investment and boost exports.”
Notes to Editors
TIGA is the trade association for the UK video games industry. TIGA’s vision is to make the UK the best place in the world to develop video games. To this end, TIGA:
- engages with policymakers to create an environment favourable to video games development;
- enhances education and skills through our accreditation programme, the TIGA Games Education Awardsand our education conference;
- promotes best practice through our membership services, including the TIGA Games Industry Awards;
- conducts primary research into the games sector, surveying hundreds of companies each year about the business environment, support policies and the health of the industry.
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