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According to latest findings from The Independent Game Developers' Association, nearly three-quarters of UK games companies feel growth in the sector will continue in 2022. Video Games Tax Relief is a major player in this - could your company claim thousands back?
The trade association that represents the video games industry recently carried out their Business Opinion Survey (BOS) to gauge views about the future of games companies in the UK.
TIGA (The Independent Game Developers' Association) carried out their research in December 2021. Having now published the findings, it appears that 68% of respondents plan to grow their organisation's workforce throughout 2022. Furthermore, nearly three-quarters of respondents (70%) believe that the UK is a favourable place for the games industry to thrive.
It’s not all plain sailing though. Here we take a look.
The survey was based upon a sample of 57 games businesses. These included small, medium and large organisations that work in games development across PC, console, tablet, mobile and VR. Note that percentages are rounded so don’t always add up to 100%.
Alongside the fact that 70% of respondents say the business and economic climate in the UK is good for their sector, 11% still said it was neither favourable nor unfavourable. Additionally, 19% felt that it is unfavourable.
The following topics were also looked at:
Employment: 68% of games companies surveyed said they plan to recruit more employees over the next 12 months. 30% expect their staffing numbers to remain the same, while 2% believe that their firm's workforce will shrink (although this is down from 9% when compared to TIGA’s previous Business Opinion Survey).
Costs: 83% of those who responded anticipate that their company's costs (for example staffing and overheads) are likely to increase during 2022.
Performance: 60% of respondents also said that their company was performing either 'very well' or 'well'. This is a slight dip compared to last year's BOS results at 70%. 32% said that their company was performing 'neither well nor badly'. 9% indicated that their company was performing 'badly' or 'very badly' (a decrease from 11% in the previous survey 12 months ago).
Prospects: Just over half (53%) of people responding said that they were more optimistic about their company's prospects in comparison to a year ago. However, 35% also said that they were neither more nor less optimistic with 12% feeling less optimistic.
Obstacles to success: Of those surveyed, 40% cited skills gaps and shortages as being the biggest barriers to business success (up from 25% previously). 19% cited discoverability (a decrease from 36% last year).
In relation to other barriers, 18% of those surveyed referred to limited access to finance. Furthermore, 7% noted the disruption caused by the pandemic and 4% referred to difficulties accessing games engines, middleware and tools.
"The UK video games industry is on track for growth, with 68 per cent of respondents to our Business Opinion Survey expecting to increase employment over the coming year. However, skills shortages and access to finance remain challenges for some studios and competition for foreign direct investment in the games industry is likely to remain significant”, said Dr Richard Wilson OBE, CEO of TIGA.
"The Government can strengthen the sector by taking three actions. Firstly, enhance Video Games Tax Relief (VGTR) by raising the rate of relief from 25 to 32 per cent to promote growth in the sector. Secondly, introduce a Video Games Investment Fund (VGIF) to improve studios' access to finance. The VGIF would provide funding of up to £500,000 available to games businesses on a matched funding basis. Thirdly, increase the supply of well-educated graduates who can work in the games industry and promote training in the sector via a Skills Investment Fund."
Despite calls for changes, Video Games Tax Relief remains a popular and valuable UK tax relief. It forms part of the UK's suite of creative industries tax reliefs, and is offered as an incentive to encourage games innovation. It’s claimed by games production companies to help cover the costs of developing British video games, subject to passing the BFI’s cultural test. The breadth and variation of qualifying expenditure is also huge - from designing and developing to testing and bug fixes.
Eligible companies typically claim the relief as an enhanced deduction of expenditure for Corporation Tax. However, in certain circumstances a cash credit may be claimed instead.
To qualify for VGTR, video games must:
Any UK games company can apply for VGTR and awards can easily run into thousands of pounds. But the key to success lies in getting expert advice and support in putting your claim together. If not, there's a very real chance your claim could fail and you won't get a penny.
"Barrie & his team at Myriad Associates have provided a great service to us for a VGTR claim. They've been professional, knowledgeable, well-coordinated and have communicated well throughout the process. We would highly recommend their specialist knowledge." - Antonio Gould, Executive Director, Teach Monster Games
Whether you’ve never claimed Video Games Tax Relief before or it’s something you’re already familiar with, working with us every time will ensure you get exactly what you’re entitled to.
Our friendly, experienced R&D tax specialists have many years of experience in creating, maximising and submitting VGTR claims, and we’re proud of our exceptional success rate too.
If you’re a games development company and are keen to find out if you’re eligible for VGTR - or want to kick off a claim - simply call us on 0207 118 6045 or send us a message. We’ve also laid out a wealth of information on our Video Games Tax Relief page.