Video games sector wants more R&D relief

The UK’s video games industry has called on the government to make improvements to the system for providing tax relief on research and development.

Measures including a rise in the rate of relief and an expansion of the regime’s scope would deliver between 60% and 75% more value to games studios than the current set-up, according to the latest report by the sector’s trade association, TIGA.

The organisation’s proposals have been backed by former financial secretary to the Treasury Stephen Timms, the Labour MP who is currently a member of the all-party parliamentary group for the computer and video games industry.

He said: ‘The last government was right to commit to supporting the… UK video games industry, and the current government should do so in the coming Budget [on 23 March]. It should also seriously consider TIGA’s ideas for reforming R&D tax credits to benefit this billion-pound, world-leading industry.’

Key points set out in Powering a High Technology Recovery: Proposals for Improving R&D Tax Credits recommend that the system’s remit should be broadened to encapsulate associated expenses incurred in the development of a new game, such as the cost involved in the protection of intellectual property.

The report also urges the government – which last year withdrew its predecessor’s plans for a tax relief for the video games industry – to increase the rate of relief under the R&D tax credit scheme for small and medium enterprises (SMEs) from 175% of qualifying expenditure to a minimum of 200%. And the regime for SMEs must be offer 28p for every £1 of on qualifying expenditure by loss-making firms, while the claims process needs to be simplified and delivery of the relief sped up.

TIGA’s CEO, Richard Wilson, claimed his organisation’s new document ‘highlights how the R&D tax credits system can be reformed to power a high-technology recovery.

‘The UK video games industry is a high-tech, highly skilled and export-oriented industry that needs the right support from government to continue to flourish,’ said Dr Wilson.

Categories: News , R&D , Stephen Timms , TIGA , Companies