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UK Games Industry Hails Boost From Tax Relief

by Amanda Banks, Tax-News.com, London

10 August 2016


UK games industry association TIGA has welcomed figures that show that 90 new games received Video Games Tax Relief (VGTR) certification in the first half of 2016.

The figures, published by the British Film Institute (BFI), showed that the budgets of these 90 games totaled GBP113m, with a UK/European Economic Area (EEA) spend of GBP99m (USD129m).

Companies can claim VGTR if the video game being developed is culturally "British," intended for supply, and at least 25 percent of the core expenditure is incurred on goods or services that are provided from within the EEA. If a company qualifies, it is also entitled to an additional deduction in computing its taxable profits and, where the additional deduction results in a loss, to surrender losses for a payable tax credit. Both the additional deduction and the payable credit are calculated on the basis of EEA core expenditure, up to a maximum of 80 percent of the total core expenditure.

TIGA Chair Jason Kingsley commented: "The UK games industry is a real beacon of business. As a sector, games and software is worth more to the UK economy than film, TV, and music combined, and we now have proof that Games Tax Relief is making a huge difference to games companies of all sizes."

Last month, the UK Government announced that it had provided GBP45.9m in VGTR to developers since the relief was launched in 2014. There have been 135 claims for VGTR, supporting UK expenditure of GBP417m.

Dr Richard Wilson, CEO at TIGA, said that the Government and industry must build on the momentum generated by the VGTR, by "looking at the level of the relief, examining the cultural test, and continuing to ensure we can access highly skilled and creative talent to work in the industry."

TIGA recommended that the Government consider increasing the level of tax relief from 25 percent to 30 percent, to ensure that the UK's relief remains "best in class."

TAGS: tax | business | tax incentives | budget | United Kingdom | cultural heritage | revenue statistics | tax reform | trade association | trade | Europe

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