Ukie, the trade body representing the UK's video games and interactive entertainment industry has called for bold reforms to the Video Games Expenditure Credit ("VGEC") in its submission to the UK Government's Spending Review 2025. This submission comes off the back of a report Ukie commissioned from Nordicity into: (i) how VGEC (and its predecessor the Video Games Tax Relief) compares to reliefs available in other countries; and (ii) how VGEC could be reformed to better support video games businesses and supercharge investment into the industry.
The VGEC reforms proposed by Ukie include:
- creating a new 'games growth' rate of 53% for projects with a budget of £10m or less;
- that the current 39% rate of relief be increased for projects with budgets of more than £10m;
- removing the 80% qualifying expenditure cap; and
- refreshing the current VGEC rules and guidance more generally to better reflect modern practices.
Ukie has also called for the UK Games Fund (a vital lifeline for video games studios - particularly small and growing studios) to be maintained for the entirety of this Parliament and increased beyond its current annualized rate of £5.5m. They also propose that funding bodies such as the British Business Bank and British Business Investments should be encouraged to provide medium-sized studios with debt and equity finance options.
According to Ukie, making these reforms would provide an additional £479m in GVA (over a 5 year period), have a return on investment of an additional £1.87 for every £1 in VGEC disbursements, create almost 6,000 new jobs in the UK, address the needs of larger multinational studios and encourage the growth of smaller, domestic games studios. Whether a submission like this will find favour with the Treasury in these straitened times remains to be seen.
arrow_upward_altView Source“ The UK has the talent, creativity, and ambition to lead the global games industry, but without action, we risk losing investment to countries with more competitive tax incentives. ”
