The Independent Game Developers Association (TIGA) – a trade body representing the UK video games industry – has called for the UK government to ensure that Video Games Tax Relief (VGTR) claims are processed “speedily and efficiently”.
The organisation says this is needed to ensure companies are able to remain solvent during the COVID-19 pandemic but according to feedback from TIGA members, “it is apparent that there are inconsistencies in the amount of time being taken to process VGTR for different businesses”, with some firms reporting delays of up to four months.
Video Games Tax Relief has been available to UK games companies since April 2014. To qualify for relief, games must pass a British Film Institute cultural test. To establish a “significant contribution to British culture”, games must satisfy a number of criteria and are awarded points for elements such as British characters, or British settings. The certification allegedly allowed the producers of the game “to claim tax relief on production costs” and when eligible, VGTR permits developers to claim back up to 20 per cent of production costs – or 25 per cent, if it’s a loss-making company.
TIGA says its own research shows that VGTR “has enabled the games development sector to grow employment by over 8 per cent per annum, and as such, “these figures reinforce the importance of VGTR to the success and continued growth of video games businesses in the UK”.
“VGTR has increased investment and employment, enabled more studios to self-publish their own IP and has enabled the UK games industry to compete more effectively,” said Dr Richard Wilson OBE, CEO of TIGA. “Feedback from some TIGA members indicate delays in the processing of VGTR for some games businesses. VGTR is vital to the sector and has a positive impact on studios’ cashflow.
“If the Government can ensure that VGTR claims are processed efficiently and paid promptly, then games businesses will be in a stronger financial position to endure the Coronavirus storm.”
More games received Video Game Tax Relief (VGTR) in 2019 than ever before. A record 247 video games received final certification for Video Game Tax Relief (VGTR) in 2019, with UK spend on games reaching final certification for the relief reaching £582.6m, up 189 per cent from £201.9m in 2018.
“VGTR could be better, maybe a lower cap could be introduced so that the amounts paid to the very top tier are somewhat reduced,” wrote MCV Develop’s own Seth Barton last year. “Tax relief may not be perfect, but the halo effect of having creative businesses such as the games industry in the UK are huge. The fact that there are jobs in the industry on offer in the UK is a motivating factor for innumerable children learning technology skills,” he added.
In related news, TIGA has extended its deadline to collate feedback on the economic measures put in place by the UK’s Chancellor of the Exchequer in response to the coronavirus pandemic. To have your say, fill out the survey here by Wednesday, April 15th, 2020. All responses will be anonymised.
“TIGA exists to support games businesses, particularly at this important time,” the organisation said. “Therefore, we want to hear your views on how COVID-19 could impact your organisation and what help you need from government. Your input will be vital in informing government measures for our industry.”
TIGA also recently teamed up with law firm Wiggin LLP to produce a guide to COVID-19 employment law implications.
