TIGA, the trade association representing the UK video games industry, said today that the Government should increase the rate of the new Video Games Expenditure Credit from 34 per cent to 39 per cent. TIGA also strongly welcomed the Government’s decision to allow connected party profits to remain eligible for tax relief.
TIGA made the comments following the Rt Hon Jeremy Hunt MP, Chancellor of the Exchequer’s Autumn Statement. In his statement the Chancellor announced a number of measures to support businesses, including raising the rate of Audiovisual Expenditure Credit.
TIGA welcomed a number of announcements in the Autumn Statement, including
- The decision to make permanent the ‘full expensing’ capital allowance scheme, a measure which allows companies to deduct the full cost of an investment in equipment from their pre-tax profits.
- The reduction in national insurance contributions.
- Investment in AI and fast growing sectors.
Dr Richard Wilson OBE, TIGA CEO, said:
“Video Games Tax Relief/Video Games Expenditure Credit (VGEC) is the principal Government fiscal measure driving growth in the UK video games industry. Since VGTR came into effect in 2014, the UK video games industry has thrived, with studio numbers, investment and employment all increasing. TIGA’s latest research indicates that between December 2021 and April 2023, the game development sector’s annual contribution to Gross Domestic Product increased from £2.9 billion to £3.68 billion.
“In our submission to the Autumn Statement we urged the Government to enable the UK to win a growing share of the global market for video games development by increasing the rate of Video Games Expenditure Credit from 34 to 39 per cent of qualifying expenditure. We also called on the Government to include ‘connected party profit’ as qualifying expenditure in the new VGEC, thereby enabling a reasonable mark-up on underlying staff costs between connected parties, employing the arm’s length principle established by OECD.[1] TIGA welcomes the Government’s decision to treat connected party profit as eligible for tax relief.
“TIGA now recommends that the Government increase the rate of VGEC. A decisive increase in the rate of VGEC will power growth in our dynamic games development sector.”
About TIGA
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 STAR Employer Awardand 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.
Video Games Tax Relief, a measure TIGA was instrumental in achieving, has been available to UK games companies since August 2014 and has driven growth in the sector. See: https://tiga.org/policy-and-public-affairs/games-tax-relief
Get in touch: Tel: 0845 468 2330 Email: info@tiga.org Web: www.tiga.org Twitter: www.twitter.com/tigamovement Facebook: www.facebook.com/TIGAMovement LinkedIn:http://www.linkedin.com/company/tiga