TIGA, the network for video games developers and digital publishers and the trade association representing the video games industry, today called on the Government to consider further measures to enable the UK video games sector to achieve its potential. TIGA made the recommendations in light of new figures from HMRC regarding Video Games Tax Relief (VGTR).
Launched in 2014, VGTR aims to promote the sustainable production of culturally relevant video games in the UK. It is aimed directly at UK companies producing video game. Since 2014, a total of £324 million has been paid out relating to 1,110 claims.
According to the latest statistics released by HMRC:
- 170 UK video games were completed in 2018-19 have claimed VGTR, with UK expenditure of £492 million.
- 345 claims were made for VGTR and received £103 million, which represented 535 games.
The figures for 2018-19 are likely to increase as more claims are received by HMRC.
Consistent with previous years, in 2018-19, the majority of claims were for smaller amounts, with 57 per cent of all claims being for £50,000 or less. 13 per cent of the claims were for amounts over £500,000.
For further information, see: https://www.gov.uk/government/statistics/creative-industries-statistics-august-2019
In response to these figures, Dr Richard Wilson OBE said:
“VGTR enables our industry to compete on a more level playing field and is encouraging production and growth in the UK video games sector. VGTR has been available to UK games companies since 2014 and will be available until at least 2022. Since its introduction in 2014, a total of £324 million has been paid out to 1,110 claims.
“The number of studios claiming VGTR demonstrates its importance to our industry’s success. TIGA research shows thatsince VGTR came into effect, headcount in our industry has grown by an average of 7 per cent per annum.
“VGTR is working well. However, we cannot afford to rest on our laurels. Other jurisdictions are introducing or enhancing their own tax reliefs for video games. The UK Government could consider further measures to ensure that our industry achieves its potential. VGTR could be strengthened by increasing the level of relief from 25 per cent to 27.5 per cent or 30 per cent to stimulate further investment and to ensure that the UK’s VGTR is ‘best in class’.
“The Government can also capitalise on our industry’s strong position by improving access to finance for small and medium sized studios. TIGA would like to see the Government introduce a Video Games Investment Fund (VGIF) to enhance studios’ access to finance. It could provide between £75,000 and £500,000 to developers nationwide, promoting the development of original IP and encourage studio growth.”
 In January 2018, Games Investor Consulting conducted research for TIGA which suggested that a 5% increase in VGTR would result in 700 new development jobs, £95m in new development expenditure, £86m in new tax receipts and £210m in new GVA.