Use of tax incentives to drive growth in the UK’s video game industry has risen by over 30% in the last year, says Moore Stephens, the Top Ten accountancy firm.
Statistics from HMRC show £105 million was claimed in Video Games Tax Relief (VGTR) in 2017/18, up from £79million in 2016/17. 345 companies were granted VGTR in the last year – a 20% rise, up from 285 in 2016/17.
Moore Stephens says the VGTR aims to make the UK an attractive destination for video game companies through offering enhanced tax relief on up to 80% of the total expenditure on designing, producing and testing a game.
Moore Stephens says the rise in tax reliefs being claimed signals a welcome return to expansion for the industry in the UK, which had faced a period of slow growth in recent years.
The UK video games industry grew quickly in the 1990s on the back of such runaway successes as the Tomb Raider and Grand Theft Auto series. However, growth in the games industry in the US, China and Scandinavia has eclipsed some of the early success of the UK.
The VGTR means that games businesses are incentivised to stay in the UK to make their new game, or relocate from other countries, with a number having already relocated development activity from the US, China and other locations.
Some of the UK’s most successful computer games companies include:
- Criterion Games,which has worked on the ‘Star Wars: Battlefront’ series as well as several titles in the ‘Need for Speed’ series
- 4J Studios,which has produced versions of the ‘Minecraft’ series for the Nintendo Switch and 3DS
- Codemasters,which produces several major racing titles, including the F1 and DiRT series
- Frontier Developments,which is best known for ‘Elite Dangerous’, and is working on a new ‘Jurassic Park’ game
- King London, part of the King Digital group, which shot to fame thanks to the ‘Candy Crush Saga’ series
- PES Productions, which has been credited with turning around the fortunes of the ‘Pro Evolution Soccer’ games