A new report shows the huge value of the government tax reliefs to the UK video games industry. The Video Games Tax Relief (VGTR) has led to unprecedented levels of growth.
The report, commissioned by the British Film Institute, shows that in 2016, total development spend in the video games sector was £1.25 billion – of which £389.9 million accessed Video Games Tax Relief. Throughout all parts of the value chain, this VGTR-supported spend generated £294.1 million in direct gross value added (GVA), and 4,640 direct full-time equivalent jobs.
The VGTR was introduced in 2014 following a seven year campaign by TIGA. On behalf of the industry, TIGA campaigned to level the playing field with overseas competitors who also benefit from tax incentives.
As shown by today’s report, the VGTR has delivered huge value to the industry. Including indirect and induced impact across the value chain, the VGTR-supported sector generated an estimated 9,170 FTEs and £522.1 million in GVA. VGTR also provides a strong return to the Treasury. The report found that for each pound of VGTR granted an additional £4 was generated for the UK economy.
Dr Richard Wilson OBE, Chief Executive of TIGA, said:
“We are delighted to see the positive impact that VGTR is having on the video games industry. Since our campaign for its introduction, VGTR has helped create thousands of jobs, allowed businesses to expand, and enable studios to create new and exciting games that are enjoyed across the world. The video games industry is undoubtedly a UK success story and the VGTR has been a big part of that journey.
“However, there is more we can do to ensure the future success of the industry. The Government needs to introduce a flexible migration regime after Brexit to ensure that our developers have access to the best and brightest talent from across the world. It is incredibly important to have talented staff who can create games that help us compete globally.
“The Government should also look to introduce a Games Investment Fund. TIGA has long argued that more public funding should be made available for early stage development work, helping developers create new IP and expand their businesses. The Fund would provide pound for pound matched funding, up to a maximum of £200,000, for original game projects.”