Tax breaks boost for the UK games industry
New statistics published today show that HMRC paid out over £197m in tax relief to video games businesses for the year to 31 March 2022 – a 4% increase on the previous year. The total paid out since its introduction in 2014 is now £830m.
These reliefs are one of a range of creative sector reliefs designed to encourage more investment into games development within the UK. The tax relief allows qualifying companies to claim a deduction against their taxable profits, and in certain circumstances surrender the tax relief for a cash credit.
Video games tax relief has shown continued growth since its introduction and has helped to bring highly skilled employment to an export focused industry, where 80% of the workforce is based outside of London. However, the UK competes on an international field to attract this mobile workforce and whilst the UK is currently seeing the benefits of the growth of the industry, there are other countries which have started to bring in more generous regimes.
Will Simpson, creative sector specialist at RSM UK, said: ‘It is great to see that this relief is continuing to drive investment, entrepreneurship and creativity, and boost employment across the UK. We were delighted to see that claimants of all sizes are benefitting from the tax reliefs.
‘These reliefs offer a fantastic benefit to video games companies and the industry is one of the UK’s great success stories. With so many other uncertainties in the current economic environment, the UK government should ensure that these reliefs remain competitive in the international landscape.’