Ukie proposes 53% tax relief for small game studios in the UK

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UK trade body Ukie has urged the Government to reform the Video Games Expenditure Credit (VGEC). 

Ukie is advocating for a 53% tax relief rate for projects with budgets of £10 million ($12.2m) or less to support smaller studios and foster creativity. 

The trade body also proposes increasing the relief rate to 39% for larger projects and removing the 80% cap on qualifying expenditure to make the UK’s tax incentives the most competitive in the global games industry. 

Ukie said that reforming the VGEC could generate an additional £479m ($605m) in Gross Value Added (GVA) annually and support nearly 6,000 new jobs within five years. 

It added that the return on investment would increase to £1.87 ($2.36) for every £1 in VGEC disbursements, building on the current £3.20 ($4.04)  per £1 invested. 

Ukie urges the Government to expand financial support by increasing the UK Games Fund beyond its £5.5m ($6.9m) budget and ensuring developers have access to funding options such as grants, loans, and equity financing through institutions like the British Business Bank.

Supercharging growth 

“The UK’s video games industry has seen substantial growth, driven by the VGEC, but this competitive advantage has been eroded over the past decade,” said Ukie CEO Nick Poole. “Our industry has the talent, the creativity, and the ambition to lead the world in game development. 

“Now is the time to supercharge growth with a VGEC that fully supports studios of all sizes. By pressing start on this enhanced approach, it will not only support the industry’s long-term sustainability but also create new opportunities for job growth and economic impact.”

Ustwo Games CEO Maria Sayans added: “The UK games industry is a global success story, but maintaining that position requires bold action. 

She added: “Reforming the Video Games Expenditure Credit to better support both small and large studios will ensure we continue to attract investment, create jobs, and produce world-leading games. 

“We want to guarantee the future of an industry that delivers both cultural and economic value to the UK.”

Earlier this month, TIGA also proposed increasing the VGEC rate from 34% to 39% and raising the qualifying expenditure cap from 80% to 100% in its submission to the Government’s Spending Review, aiming to further support the UK games industry.