Video games companies
The UK video games industry is important economically and culturally and is the largest video games sector in Europe with around 11,000 people directly involved in games development. Retail and digital game sales exceeded video sales back in 2013 and are more than double the value of music sales. Games are also exported widely.
A favourable UK tax environment - R&D tax credits and Video Games tax Relief (VGTR) - has been crucial in levelling the playing field to enable UK companies to compete internationally, particularly against competitors in Canada.
The video games tax relief applied from 1 April 2014 and the HMRC’s statistics show that ten claims totalling £0.5m were paid in 2014-15, increasing to 130 claims and payments of £45.4m in 2015-16, and 280 claims amounting to £73m for 2016-17.
We filed a number of these claims ourselves for our clients and all have been paid in full. We have regular contact with HMRC which helps us maintain a detailed understanding of how the rules are being applied in practice and gives us insight into likely future changes.
In addition to the UK tax incentives there are funding opportunities available from Creative Europe (the European Union’s financial support programme for the creative, cultural and audiovisual sectors in Europe) for video game companies to develop narrative led video games that have the potential to circulate within the European Union and beyond.
The UK’s vote to leave the EU means that the current EU state aid approval process may change and the UK government could have more flexibility to improve the VGTR.
Please contact one of our video games specialists to find out how we can help you.