Video Games: Tax Allowances
The question
To ask the Chancellor of the Exchequer, what assessment she has made of potential impact of the Video Games Expenditure Credit on levels of (a) employment, (b) investment, (c) studio formation and (d) IP development.
Answered by Dan Tomlinson
The Government recognises the importance of the creative industries, including the key role they play in driving economic growth. Video games jobs are highly productive at nearly double the average national output, and technology developed by games businesses contributes an estimated £1.3 billion output to the UK economy each year.
Video games companies benefit from the Video Games Expenditure Credit, which provides a tax credit of 34 per cent on UK video games development costs.
It is too soon to conduct an assessment of VGEC’s impact given it was introduced on 1 January 2024, after which there will be a lag of at least 12 months as accounting periods end and corporation tax returns are filed. An evaluation of the Video Game Tax Relief (VGTR), which VGEC is replacing, was published in July 2017. It can be found here: https://www.gov.uk/government/publications/video-game-tax-relief-evaluation.
The government will continue to work with industry to monitor the VGEC and its effectiveness on an ongoing basis.
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