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UK games industry

Trade organisation responds to UK Government's R&D Tax Credit and Patent Box Review.


TIGA, the trade association representing the UK games industry, said today that the R&D tax credit for small firms should be enhanced by widening the categories of qualifying expenditure, raising the level of relief, increasing the value of the relief for loss making companies, and simplifying the claim process. The R&D tax credit for large firms should be retained. TIGA recommended that the proposed Patent Box be extended to cover royalties so that income from royalties would be taxed at a lower rate than other profits. However, relatively few developers benefit from royalties and it is not a primary source of income for developers. The Government should therefore look again at TIGA’s Games Tax Relief, a measure that would benefit a wide range of developers, ranging from independents to in-house publisher studios. TIGA made the comments in response to a consultation exercise by HM Treasury concerning the Patent Box and Research and Development (R&D) tax credits, which ends today.

Dr Richard Wilson, CEO of TIGA, said:

“TIGA’s mission and vision are to advance the interests of UK game developers and to make the UK the best place in the world to do business. A favourable tax regime is crucial to these goals. With respect to the R&D tax credits, TIGA recommends that the existing R&D Tax credit for large firms should be retained. As far as the R&D tax credit for small firms is concerned, the categories of qualifying expenditure should be widened, the level of relief raised, the value of the relief for loss making companies increased, and the claim process simplified.”

TIGA recommended that HM Treasury should make changes in four key areas to the R&D tax credit.

The scope of R&D tax credits credit should be expanded to include other associated costs incurred in the development of a new game: premises costs, the costs of applying for IP protection and design costs. The rate of relief under the SME R&D tax credit scheme should be increased from 175 per cent of qualifying expenditure to at least 200 per cent. This would mean that for every pound that an SME spends of qualifying expenditure it would get two pounds of tax deduction which it would use to reduce its corporation tax. SME R&D tax relief should be reformed to help loss making companies. At present, loss making businesses receive 24p for every £1 spent of qualifying expenditure. This should be increased to 28p for every £1 spent, so that loss making, R&D intensive firms also share in our proposed rate of relief. The claims process should be simplified. For example, HMRC could make more advance agreements of claims so that developers in the games industry and other sectors could have more certainty of what reliefs they are going to receive. Additionally, developers should have a named contact within their HMRC R&D Unit to approach with questions about the eligibility of their costs and activities.  

Jason Kingsley, TIGA Chairman and CEO and Creative Director at Rebellion, said:

“The UK needs to do more to support investment in R&D. As the House of Commons Scottish Affairs Committee recently noted, the R&D tax credits ‘...could be adapted and enhanced, at little cost to the Exchequer, but with great benefit to video games companies.’ [1] TIGA’s proposals provide an effective blueprint for improving the R&D tax credits which, if implemented, would help many UK games developers.

“The Government’s intention to introduce a Patent Box whereby a 10 per cent tax rate would apply to profits arising from patents would not help many game developers as relatively few take out patents. Amending the Patent Box plan to cover royalties so that income from royalties was taxed at a lower rate than other profits would be more beneficial to games developers than simply retaining the unadulterated Patent Box.  However, relatively few games developers benefit from royalties and it is not a primary source of finance. That is why it is important for the Coalition Government to look again at TIGA’s Games Tax Relief. This tax measure would stimulate inward investment from overseas publishers into the UK and help a swathe of UK owned and controlled development studios. TIGA looks forward to discussing our proposals with the Government.”


Notes to editors:

About TIGA:

TIGA is the trade association representing the UK’s games industry. The majority of our members are either independent games developers or in-house publisher owned developers. We also have games publishers, outsourcing companies, technology businesses and universities amongst our membership. TIGA was awarded ‘Trade Association of the Year’ and the ‘Member Recruitment Award’ at the Trade Association Forum Best Practice Awards 2010. TIGA has also been named as a finalist in the 2010 Chartered Management Institute (CMI) National Management and Leadership Awards in the category of ‘The Outstanding Organisation of the Year Award (SME)’. TIGA is an ‘Investors in People’ accredited organisation.

TIGA's vision is to make the UK the best place in the world to do games business.  We focus on three sets of activities: political representation, generating media coverage and developing services that enhance the competitiveness of our members.  This means that TIGA members are effectively represented in the corridors of power, their voice is heard in the media and they receive benefits that make a material difference to their businesses, including a reduction in costs and improved commercial opportunities.

For further information, please contact Richard Wilson, TIGA CEO on: 07875 939643, or email

[1] House of Commons Scottish Affairs Committee, Video Games Industry in Scotland, Second Report of Session 2010-11, Volume 1, February 2011, p. 20, paragraph 63.  

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