Dr Richard Wilson OBE
CEO, TIGA
If smaller games studios are to thrive, more support is required from the Government, including the introduction of an Independent Games Tax Credit (IGTC).
The UK games industry is strong in game development, boasting incredible talent and generating economic growth across the UK. However, to maintain this momentum and compete effectively, we need the next government and parliament to consider a significant policy change: the introduction of IGTC.
Fairer playing field with IGTC
Many countries understand the economic and cultural value of video games, offering production tax reliefs to their domestic studios. Canada, France, Ireland, Belgium, Australia and a staggering 15 states in the USA all incentivise game development. Some of these tax reliefs are more generous than the UK’s existing Video Games Expenditure Credit and so put the UK development sector at a disadvantage.
How an IGTC would work for studios
An IGTC would complement the existing Video Games Tax Relief (VGEC) scheme, offering a more generous credit specifically tailored to smaller studios.
Here’s how it would work:
- Games with production budgets of less than £15 million would qualify for a new IGTC, offering a 53% credit on 80% of qualifying expenditure. This translates to a significant financial boost for development costs, excluding marketing and distribution.
- Games with budgets exceeding £15 million in total production costs would continue to utilise the current VGEC scheme, receiving a 34% credit on 80% of qualifying expenditure.
The benefits of an IGTC extend
far beyond individual studios.
Potential benefits of an IGTC
An IGTC would boost smaller studios. These studios often create innovative, critically acclaimed titles, but many face difficulties accessing finance. It would reduce the cost of games production for smaller studios. It would enable more studios to scale up, take greater creative risks and produce even more exciting games.
The benefits of an IGTC extend far beyond individual studios. A thriving games industry creates jobs, fosters innovation and attracts investment. By nurturing our domestic talent, we ensure the UK remains a leader in the global games market, generating economic growth for years to come.
Enabling continuous growth in UK games
The time to act is now. The next Government and Parliament have the power to unlock the full potential of the UK games industry with an Independent Games Tax Credit. Let’s work together to ensure the UK remains a global leader in creating the video games of tomorrow.
