TIGA, the network for games developers and digital publishers and the trade association representing the video games industry, has commented on the Government’s proposals to help small businesses outlined in the 2018 Budget.
Alongside various funding increases for public services, the government outlined several measures that will impact entrepreneurs and small businesses.
VAT registration threshold
- Alongside the Budget, the government is publishing a response to the call for evidence on the design of the VAT threshold. The responses to the call for evidence did not provide a clear option for reform. The VAT threshold will therefore be maintained at the current level of £85,000 for a further 2 years until April 2022. The government will look again at the possibility of introducing a smoothing mechanism once the terms of EU exit are clear.
Full fibre networks
- The government set out its strategy to meet the goal of a nationwide full fibre network by 2033 in the Future Telecoms Infrastructure Review published in July 2018. Full fibre networks are much faster, more reliable, and cheaper to operate than their copper predecessors. The Budget sets out the next steps to accelerate the rollout of full fibre:
- the Budget allocates £200 million from the NPIF to pilot innovative approaches to deploying full fibre internet in rural locations, starting with primary schools, and with a voucher scheme for homes and businesses nearby. The first wave of this will include the Borderlands, Cornwall, and the Welsh Valleys
- alongside the Budget, the government is publishing consultations to mandate gigabit-capable connections to new build homes and speed up the delivery of upgraded connections to tenants, making it quicker and easier for communications providers to roll out full fibre networks
- the government is also announcing that Suffolk is the first local area to be awarded £5.9 million of funding from the third wave of the Local Full Fibre Networks challenge fund, enabling next-generation full fibre connections to key public buildings
British Business Bank
- The Government will extend the funding of the British Business Bank’s Start-Up Loans Programme to 2021 so it can continue to provide loans and mentoring to entrepreneurs. The British Business Bank, which started operating in 2014, is the government’s UK-wide economic development bank. It makes finance markets for smaller businesses work more effectively, allowing those businesses to prosper, grow and build UK economic activity
- The Intellectual Property Office will support more companies to use their intellectual property to access finance, piloting a new offer to help businesses secure high-quality valuations, and will work with banks to improve their awareness of the opportunities and true credit risk associated with such lending.
SME access to dispute resolution and redress
- The government welcomes the FCA’s plans to expand access to the Financial Ombudsman Service (FOS) to small and medium-sized enterprises (SMEs) with a turnover of up to £6.5 million, along with its consultation on increasing the FOS award limit to £350,000. As outlined in the FCA’s recent policy statement, the FOS will now take steps to ensure they have the necessary skills and processes in place to handle these new cases. The government also expects the banking industry to set out its response to the recommendations in Simon Walker’s report on alternative dispute resolution for SMEs by the end of November. This includes responding to its recommendations for a voluntary dispute resolution mechanism for SMEs outside the FOS remit, but below £10 million turnover, and to set up a process that can address unresolved historical complaints
Dr Richard Wilson OBE, Chief Executive Officer of TIGA, said:
“95 per cent of video games companies are small and micro businesses and there are a number of measures in the Budget that will be helpful to them.
“In particular, we welcome the steps taken to ensure the Intellectual Property Office can support more companies to use their intellectual property to access finance. Access to finance is a major challenge for many video games developers, with 38 per cent of respondents to TIGA’s 2017 business survey said that access to finance was holding back their business.
“We will continue to push for the introduction of a Games Investment Fund, which would provide pound for pound matched funding, up to a maximum of £500,000, for original game projects. The Games Investment Fund would also provide a commercial mentoring business advisory service, staffed by industry veterans, for games companies that access its grants or loans.
“TIGA will continue its campaign to ensure that the video games industry has easy access to recruit the best and brightest talent from the EU, EEA and beyond. As an industry that competes on a global level, we need access to the very best global talent, which is why keep the Tier 2 salary threshold should be kept at competitive levels.
“We also want to see the Apprenticeship Levy reformed into a more general training levy, which would give employers more scope to choose the educational pathways to suit their needs. This would help upskill current employees.”