Video Games: Tax Allowances
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the level of international competitiveness of the Video Games Expenditure Credit; and what assessment she has made of the potential merits of increasing the (a) tax credit and (b) cap of total core expenditure to 100%.
Answered by Dan Tomlinson
The Government recognises the importance of the creative industries, including the contribution made by the UK’s video games sector to growth and innovation. We support the sector through the tax system and through funding, and this is a very competitive offer internationally.
Video games companies benefit from the Video Games Expenditure Credit (VGEC), which provides a generous tax credit of 34 per cent on UK video games development costs. Some countries offering higher refundable rates but with tighter caps or narrower qualifying expenditure, while the UK’s approach provides a predictable and scalable form of support across a broad base of development costs.
Tax support sits alongside the Department for Culture, Media and Sport’s new £30 million Games Growth package, designed to back the next generation of start‑up studios and talent and attract further inward investment.
The Government keeps the whole tax system under review to ensure it remains effective, targeted and delivers value for money.
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