Video Game Tax Relief in 2017: Power-Ups and Easter Eggs
With 2016 firmly in the rear-view mirror, it’s time to reflect on how 2017’s shaping up so far. Big things are happening in video games this year. Here’s what you need to know to hunt down the industry’s most valuable Easter eggs and make the most of your VGTR claim.
Power-Up: £565 million in tax relief for UK media and entertainment
Stats in from accounting and advisory network Moore Stephens are forecasting big tax breaks for UK media firms. Their figure of £565 million claimed is 9% up on 2016’s hi-score, and is a great sign for British entertainment industries.
Looking at video games specifically, things are even better. Video Games Tax Relief (VGTR) in 2017 is expected to bounce up by a full 14%, to £40 million from last year’s £35 million. It might sound like a small chunk of the overall tax relief flying around, but it’s one of the largest percentage increases in the industry – and further proof that you need to be sure you’re not missing out on what’s quickly become an incredibly valuable incentive scheme.
A new challenger appears: the British Games Institute?
There are calls from some of the biggest names and loudest voices in the industry for a dedicated British Games Institute to be set up. UKIE and developer network TIGA are leading the charge, and major figures like Eidos Life President and Fighting Fantasy mastermind Ian Livingstone are onboard. The idea is for the institute to:
- Oversee a Games Investment Fund for UK developers.
- Work with universities to promote the video games industry.
- Support best practice.
- Run events and competitions to raise the profile of British games culture.
Responses to the idea so far have been broadly positive. Over 350 industry figures have already spoken up in favour of it, seeing an opportunity for video games to step out from under the shadow of the film and TV industries. Games already compete strongly with film in terms of revenue, but receive only a tiny fraction of the public funding. Video games are firmly established as a cornerstone of British culture. Maybe it’s time they were openly recognised as such.
Traditional funding stuck on Hard Mode
The figures are in and it looks like UK games companies are still struggling to tap into traditional financing.
Only 11% found the investment they needed through institutional finance last year, while under a third managed to get hold of grants. 1 in 5 got their investments from individuals, whether Business Angels or personal acquaintances. Only 10% cast their nets further via the crowdfunding route, though.
It can be tough to raise money when traditional investors don’t “speak your industry’s language”. Yet another reason why Video Game Tax Relief is a significant shot in the arm to the video games business.
UK still climbing the global leaderboards for Games Development
With well over 2,000 video games companies operating in the UK, the industry’s looking increasingly healthy. Some of the biggest successes of the last few years include Rocksteady Studios, who scored 2015’s fastest selling title with Batman: Arkhan Knight, and Rockstar Games who grossed $1 billion in just 3 days with Grand Theft Auto V.
At the indie end of the scale, London-based Ustwo has punched well above its weight with Monument Valley. Described as a “surreal exploration through fantastical architecture and impossible geometry”, the game has won 20 international awards and been downloaded over 26 million times!
VGTR is still dropping loot for UK companies
Word is continuing to get around about Video Games Tax Relief. 75 games were certified through the scheme in the first 3 months of 2016 alone, with an average score of 20% of their development costs in tax relief. In total, we’re talking about £46 million going to UK studios since VGTR’s launch in 2014, in recognition of an amazing £417 million in overall UK spending!
There’s never been a better time to work in the UK’s booming video games industry. As a result, there’s never been a bigger need to take advantage of the tax relief on offer. Talk to RIFT about VGTR, and let us show you how to blast your business up to the next level.
Find out more about VGTR and we can help you make your claim by getting in touch today