TIGA initially secured Games Tax Relief in the March 2010 Budget. This was dropped by the Coalition Government in the June 2010 Budget. TIGA ignored the siren calls to give up and instead continued to wage a vigorous campaign for the introduction of Games Tax Relief.
After another 18 months of relentless work, TIGA successfully persuaded the Coalition Government in the March 2012 Budget to back Games Tax Relief. However, Games Tax Relief was then blocked by the EU Commission as it announced a formal investigation into the proposal in April 2013.
TIGA then submitted compelling evidence to the EU Commission, co-ordinating its efforts with the UK Government and its partners in the European Games Developers’ Federation (EDGF) to successfully assuage the EU Commission’s concerns. Finally, TIGA’s campaign for Games Tax Relief reached a successful conclusion in March 2014 when the EU Commission finally consented to its introduction in the UK.
Tax relief for the video games sector is increasing employment, innovation and investment in the UK video games industry and enabling us to compete on a more level playing field with our overseas competitors. This is a significant victory for the UK games development and digital publishing sector and will provide a powerful boost to the industry.
TIGA published a report in February 2021 evidencing the benefits of an increase in Video Games Tax Relief (VGTR) from 25 per cent to 32 per cent. The report, Boosting the UK Video Games Industry: Increasing Video Games Tax Relief (TIGA, 2021) analyses survey data from industry, data from the government and economic modelling. The report demonstrates that a 32 per cent rate of VGTR would result in more investment, greater headcount growth and larger tax receipts for HM Treasury.
VGTR was crucial in enabling the UK video games industry to compete on a more level playing field against the UK’s international competitors, particularly Canada, which benefit from generous forms of tax relief. The Irish Government introduced a digital gaming tax credit for the Republic. The tax credit provides 32 per cent corporation tax relief on design, production and testing expenditure of €100,000-€25 million per project. In light of this, TIGA called for an increase in the rate of VGTR from 25 to 32 per cent.
TIGA published an updated report in February 2023 evidencing the benefits of an increase in Video Games Tax Relief (VGTR) from 25 per cent to 32 per cent. The report, Going for Growth: Growing the UK Video Games Industry Through VGTR (TIGA, 2023), demonstrated that increasing the rate of VGTR from its current rate of 25 per cent to 32 per cent of qualifying expenditure would create nearly 1,900 additional full-time development jobs over five years.
The Government announced in March 2023 that Video Games Tax Relief will be replaced with a Video Games Expenditure Credit. The new credit will have a rate of relief of 34% on 80% of qualifying expenditure. TIGA has campaigned for a higher rate of relief for many years and in advance of the 2023 Budget.
The Chancellor announced the following details concerning the Video Games Expenditure Credit:
The Video Games Expenditure Credit will cover the current Video Games Tax Relief and will have a rate of 34%.
Qualifying expenditure for the Video Games Expenditure Credit will be expenditure on goods and services that are ‘used or consumed in the UK’.
From 1 April 2025, new games must claim the Video Games Expenditure Credit. Games in development on 1 April 2025 may continue to claim EEA expenditure under the current video games tax relief until April 2027.
The eligibility requirement for the Video Games Expenditure will require a minimum of 10% of expenditure to be used or consumed in the UK.
There will be no cap on subcontracting in the Video Games Expenditure Credit.
The 80 per cent cap on qualifying expenditure will be maintained.
The expenditure credits will be available to claim from 1 January 2024. To give companies time to adjust there will be a generous transition period: games that have not concluded development on 1 April 2025 may continue to claim the existing tax reliefs until April 2027, at which point the existing reliefs will sunset. This means that games in development on 1 April 2025 may continue to claim EEA costs under the current video games tax relief until April 2027.
TIGA is now actively campaigning for an increase in the generosity of the Government’s newly proposed Video Games Expenditure Credit (VGEC). Although the nominal rate of the VGEC (34 per cent) is higher than the existing rate of VGTR (25 per cent), the new VGEC is only marginally more generous in practice. VGEC will be calculated from qualifying expenditures. It will be treated as an income receipt, included in a business’s profits and subject to corporation tax. Accountancy firms have calculated the 34 per cent VGEC rate results in an effective rate of 25.5 per cent of qualifying expenditure (as opposed to the current 25 per cent relief).
TIGA, therefore, recommends that the proportion of qualifying expenditure should be increased from 80 per cent to 100 per cent. This would incentivise investment and job creation and help ensure that the UK remains an attractive destination for foreign direct investment in the video games industry.
“I was very impressed by the case that you made in relation to tax breaks for computer games and I pressed this point again when I wrote to the Chancellor of the Exchequer about the budget…I…congratulate you and TIGA on being such a driving force in achieving it [Video Game Tax Relief].”John Swinney MSP,Deputy First Minister of Scotland and former Cabinet Secretary for Finance and Sustainable Growth (2007-2016)
“Unlike many trade associations, TIGA has consistently provided strong empirical evidence to back up its case for Government support and investment. TIGA made a powerful case for a tax credit for games production and I was pleased to work with TIGA in securing this measure in the recent Budget [i.e. 2012 budget].”Justin Tomlinson MPformer Chair of the All Party Computer and Video Games Industry Group, and Minister of State for Disabled People, Work and Health
“As an MP I meet many trade associations, public affairs organisations and lobbying groups. TIGA has earned a unique reputation as an independent, professional and tenacious campaigning body. TIGA has waged a seven year campaign for Video Games Tax Relief. Along the way, TIGA has managed to persuade the UK’s four major political parties, three governments (Labour in 2010, the Scottish Government in 2011 and the Coalition Government in 2012) and finally the EU Commission in 2014 to support Video Games Tax Relief. To put it simply, Games Tax Relief would not have happened without TIGA. I’m delighted to have been able to work with TIGA to successively deliver Games Tax Relief and to support an industry that I care passionately about.”
“I pay tribute to TIGA for playing a leading role in raising the profile of the games industry in Parliament and for playing a critical role in lobbying for this tax change [Video Game Tax Relief]”.Rt Hon John Whittingdale OBE MPMinister of State for Media and Data, and former Chair of the Culture, Media and Sport Select Committee
“The final approval of tax relief for the video games industry is terrific news and will ensure that the UK remains one of the leaders in the development and production of electronic games. TIGA deserves considerable credit for the success of their campaign which they have promoted over a number of years.”
"Both as a Government Minister and from the Opposition benches, I have seen TIGA campaigning professionally and tenaciously for Games Tax Relief. TIGA played a critical role in securing the Relief, convincing successive governments - a difficult job in both cases. I hope the tax credit which their lobbying has secured, and which I strongly support, will provide a powerful boost to the UK video games industry."Rt Hon Stephen Timms MPChair of the Work and Pensions Select Committee
“I have no doubt that with TIGA - the UK’s best trade association – the issues that matter to the video games sector will remain high up the political agenda.”Tom Watsonformer Deputy Leader of the Labour Party (2015-2019) and former Shadow Secretary of State for Digital, Culture, Media and Sport (2016-2019)
“TIGA’s proposal to increase the rate of VGTR from 25 per cent to 32 per cent would give a powerful stimulus to the UK video games industry. An increase in the rate of VGTR would boost investment and employment, enable more studios to self-publish their own IP, and enable the UK games industry to compete more effectively around the world. With more and more young people developing an interest in a career in the games industry, it is vital we do all we can to give the industry the best possible future and, subsequently, to create as many high skilled job opportunities as possible.” - 5 March 2021Dehenna Davison MPVice-Chair of the All Party Parliamentary Group for Video Games