VGTR essential to enhancing the industry’s headcount and attracting inward investment

By October 2, 2019 Press Releases

TIGA, the trade association representing the UK video games industry, has today reaffirmed the strong, direct, causal link between the introduction of Video Games Tax Relief (VGTR) and the growth in British games development companies and industry headcount.

The UK Government successfully won approval for the continuation of VGTR in November 2017. The relief will now continue until at least 2023. This welcome approval by the European Commission will have a long-term positive impact on the UK games development sector.

VGTR’s impact was clearly felt after the announcement of VGTR but also in advance of VGTR becoming available, and even more so following the actual availability of the Relief. Headcount in the industry has grown by over 7 per cent per annum since VGTR came into effect in 2014.

TIGA’s research indicates that between 2019 and 2023, VGTR is predicted to have the following impact:

  • Create 3,176 new development jobs and 5,800 indirect jobs in the wider supply chain.
  • £501 million in new investment should be made by games development companies.
  • The games development sector’s contribution to UK GDP should rise by over £1.5 billion, with an overall contribution to the UK economy over 5 years approaching £10.6 billion.
  • Growth resulting primarily from VGTR could generate £626 million in new tax receipts to HM Treasury.

TIGA research suggests that if VGTR were to be withdrawn, the sector would decline by over 15 per cent, equating to the loss of over 2,250 jobs in games development and over 4,100 indirect jobs in the wider supply economy. This together with high levels of competition, constraints around access to finance and labour, and uncertainty over Brexit, would create an unfavourable environment for the industry to succeed.

The UK games development industry’s strong continued growth figures following VGTR’s introduction should ensure that VGTR will more than pay for itself in terms of tax revenues, in addition to having a significant positive impact on the wider UK economy.

On VGTR, Dr Richard Wilson OBE, TIGA CEO said:

“Video Games Tax Relief, which effectively reduces the cost of games development, was first implemented in April 2014 after a lengthy campaign led by TIGA. VGTR is aimed directly at UK companies producing video game and, since its introduction, a total of £324 million has been paid out relating to 1,110 claims.

“The number of studios claiming VGTR demonstrates its importance to our industry’s success. TIGA research shows that since VGTR came into effect, headcount in our industry has grown by an average of 7 per cent per annum.

“VGTR has been crucial in enabling the UK video games industry to grow durably and compete on a more level playing field against the UK’s international competitors, particularly Canada. In a post-Brexit world, it will be even more vital to maintain, improve and enhance VGTR in order to attract inward investment and to maintain the competitiveness of the sector.”


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