Difference between revisions of "Video Games Tax Relief (VGTR)"
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== Understanding the Video Games Tax Relief == | == Understanding the Video Games Tax Relief == | ||
| − | + | Much like [https://www.gov.uk/guidance/corporation-tax-creative-industry-tax-reliefs in other creative sectors] such as film and theatre, tax relief exists in the UK games industry in order to promote works deemed to provide cultural value and support UK businesses. | |
| − | + | Ukie’s [https://ukie.org.uk/a2f/VGTR Access to Finance Guide] provides detailed guidance on VGTR. Additionally, HMRC offers guidance on taxation for games companies in its [https://www.gov.uk/hmrc-internal-manuals/video-games-development-company-manual Video Games Development Company Manual]. | |
| + | |||
| + | Video Games Tax Relief is an incentive that allows games studios to claim tax relief from the Government, following the development of a game. In order to qualify for VGTR, the game must meet several criteria and pass the BFI’s [https://www.bfi.org.uk/film-industry/british-certification-tax-relief/cultural-test-video-games Cultural Test]. | ||
== Applying for the Cultural Test == | == Applying for the Cultural Test == | ||
Revision as of 12:16, 18 November 2019
Contents
Understanding the Video Games Tax Relief
Much like in other creative sectors such as film and theatre, tax relief exists in the UK games industry in order to promote works deemed to provide cultural value and support UK businesses.
Ukie’s Access to Finance Guide provides detailed guidance on VGTR. Additionally, HMRC offers guidance on taxation for games companies in its Video Games Development Company Manual.
Video Games Tax Relief is an incentive that allows games studios to claim tax relief from the Government, following the development of a game. In order to qualify for VGTR, the game must meet several criteria and pass the BFI’s Cultural Test.
Applying for the Cultural Test
You can do that via the BFI website.
Economic Impacts of the VGTR
These can be found in the Screen Business report.
Amount Paid in Tax Relief to Date
According to data released by HMRC in August 2019, a total of £324 million of VGTR has been paid out to 1,110 claims since the relief was launched in April 2014. In 2018-19, 345 claims were made for a total of £103 million, which represented 535 games.
Since the relief was introduced in 2014, 1,075 video games have made claims, accounting for £2.6 billion of UK expenditure.
Claims and amount of relief paid on receipts basis
| Paid | |||
|---|---|---|---|
| Year Claim Paid | Number of Games | Number of Claims | Amount (£m) |
| 2014-15 | 10 | 10 | - |
| 2015-16 | 100 | 130 | 45 |
| 2016-17 | 340 | 275 | 71 |
| 2017-18 | 475 | 345 | 104 |
| 2018-19 | 535 | 345 | 103 |
| Total | - | 1,110 | 324 |
NB. No total provided for number of games, as a single game can be claimed in multiple years.
Claims and amount of relief paid on receipts basis, split by size of claim
| 2016-17 | 2017-18 | 2018-19 | ||||
|---|---|---|---|---|---|---|
| Size of claim | Number | Amount (£m) | Number | Amount (£m) | Number | Amount (£m) |
| Up to £5,000 | 30 | - | 65 | - | 50 | - |
| £5,001 to £10,000 | 35 | - | 35 | - | 25 | - |
| £10,001 to £25,000 | 55 | 1 | 80 | 1 | 65 | 1 |
| £25,001 to £50,000 | 35 | 1 | 40 | 1 | 55 | 2 |
| £50,001 to £100,000 | 30 | 2 | 30 | 2 | 45 | 3 |
| £100,001 to £500,000 | 50 | 11 | 65 | 13 | 55 | 12 |
| £500,001 to £1,000,000 | 20 | 13 | 15 | 9 | 20 | 12 |
| Over £1,000,000 | 15 | 42 | 25 | 77 | 30 | 73 |
| Total | 275 | 71 | 345 | 104 | 345 | 103 |
NB. Numbers are rounded to the nearest 5 and amounts to £1 million. Totals may not sum due to rounding.
Video Games which claimed tax relief, by expenditure and financial year of completion
| Finance Year of Completion | Number of Games Claimed | UK Expenditure* (£m) | Total Expenditure (£m) |
|---|---|---|---|
| 2014-15 | 70 | 23 | 25 |
| 2015-16 | 230 | 546 | 747 |
| 2016-17 | 250 | 405 | 454 |
| 2017-18 | 240 | 323 | 435 |
| 2018-19 | 170 | 492 | 1,121 |
| Incomplete* | 110 | 780 | 927 |
| Total | 1,075 | 2,569 | 3,709 |
NB. Expenditure final and interim only. Games with an estimated completion date after 31st March 2019 are defined as 'Incomplete'.
Certifications by Fiscal (Financial) Year
Latest data available via the BFI here
Final Certifications per Year
| Year | Number | EEA/UK spend (£m) | Total budget (£m) | UK spend as a % of total budget |
|---|---|---|---|---|
| Apr 2014-Mar 2015 | 19 | 14.3 | 15.1 | 95.2% |
| Apr 2014-Mar 2016 | 133 | 189.0 | 275.3 | 68.7% |
| Apr 2014-Mar 2017 | 214 | 220.8 | 258.3 | 85.5% |
| Apr 2014-Mar 2018 | 201 | 247.8 | 262.6 | 94.4% |
| Apr 2014-Mar 2019 | 188 | 430.1 | 1,042.1 | 41.3% |
Interim Certifications per Year
| Year | Number | EEA/UK spend (£m) | Total budget (£m) | UK spend as a % of total budget |
|---|---|---|---|---|
| Apr 2014-Mar 2015 | 47 | 157.7 | 166.32 | 94.7% |
| Apr 2014-Mar 2016 | 136 | 575.75 | 631.22 | 91.22% |
| Apr 2014-Mar 2017 | 187 | 412.27 | 482.22 | 85.5% |
| Apr 2014-Mar 2018 | 181 | 540.43 | 1,107.17 | 48.8% |
| Apr 2014-Mar 2019 | 151 | 411.91 | 536.96 | 41.3% |
Median budgets of interim video game cultural test certifications
| Year | Median budget (£m) |
|---|---|
| 2014* | 0.2 |
| 2015 | 0.6 |
| 2016 | 0.4 |
| 2017 | 0.4 |
| 2018 | 0.5 |
| 2019 (Q1) | 1.0 |
NB. As the tax relief for video games commenced in April 2014, median budget for 2014 is for Q2-Q4.
Certifications by Calendar Year
Latest data available via the BFI here
Final Certifications per Year
| Year | Number | UK/EEA spend (£m) | Total budget (£m) | UK/EEA spend as a % of total budget |
|---|---|---|---|---|
| 2015 | 116 | 180.9 | 265.6 | 68.1% |
| 2016 | 189 | 202.2 | 224.5 | 90.1% |
| 2017 | 212 | 248.8 | 277.5 | 89.7% |
| 2018 | 195 | 201.9 | 263.9 | 76.5% |
Interim Certifications per Year
| Year | Number | UK/EEA spend (£m) | Total budget (£m) | UK/EEA spend as a % of total budget |
|---|---|---|---|---|
| 2015 | 121 | 548.0 | 603.6 | 90.8% |
| 2016 | 176 | 401.7 | 466.9 | 86.0% |
| 2017 | 179 | 434.3 | 461.7 | 94.1% |
| 2018 | 170 | 517.6 | 1,106.4 | 46.8% |
Median budgets of interim video game cultural test certifications
| Year | Median budget (£m) |
|---|---|
| 2015 | 0.6 |
| 2016 | 0.4 |
| 2017 | 0.4 |
| 2018 | 0.5 |
