Video Games Tax Relief boost for UK Games Industry

Game Republic Affiliate Member – Plus Accounting Chartered Accountants kindly gave us their take on the latest budget announcements and in particular the new reforms of Video Games Tax Relief. Luke Thomas (pictured) shares his assessment here:

The UK Games Industry has been given a major boost with the announcement in the budget that the Video Games Tax Relief (VGTR) is being replaced with a new ‘Video Games Expenditure Credit’ from April 2025.

The existing Video Games Tax Relief has been in place since 2014, in which time the UK Games Industry has witnessed significant growth. The UK government has clearly identified the Games sector as a key part of the UK economy and wishes to provide specific support to ensure it continues its success.

The government recently issued proposals to reform VGTR with the aim of modernising the relief, maximising the industries impact on the UK economy, simplifying the claims process, and preventing abuse of the relief.

There are several features of VGTR that are changing, some of which will have a significant impact on UK Games companies and the relief they can claim.

The key changes are:

  1. The headline rate of relief is increasing to 34% from 25% under the current VGTR.
  2. Qualifying Core Expenditure will only be available on goods and services ‘used or consumed in the UK’, as opposed to the existing rules which allow for costs incurred within the European Economic Area.
  3. The cap on qualifying expenditure will be held at 80%.
  4. The current £1million cap on subcontractor costs (per game) will be removed.

The government has made it clear that any games in development prior to 1 April 2025, can continue to use the existing scheme until April 2027. However, any expenditure credits available under the new rules can be claimed from 1 January 2024.

A brief look at the numbers suggests that under the new rules, the relief available will be the same whether the company is profit or loss making.

Under the current rules a profit-making company attracts relief of 80% x 19% = 15.2% on the qualifying costs it incurs, whereas a loss making company attracts relief of 80% x 25% = 20% on its qualifying costs.

Under the new tax credit rules both a profit or a loss-making company would attract circa 20% tax relief by way of either a corporation tax saving or repayable tax credit, which seems fair, but not quite as good as the headline 34% rate of relief might initially lead you to believe.

There are clearly some concerns with the removal of EEA expenditure qualifying for the relief and some will need to factor this into future plans. For some, careful consideration of structures in place will be needed once details of the Anti-abuse measures are clarified.

Overall, this should be seen as a significant boost to the UK Games Industry. It gives recognition of the importance of the sector to the UK economy, certainty of the changes coming into effect well in advance to enable planning and a guarantee of ongoing financial support for the foreseeable future.

Games companies looking for tax advice can get 10% of annual fees with Plus Accounting   – to make an appointment to see how Plus Accounting can help you and your company click here.

Game Republic to host Northern Lights panel at Develop Brighton

Game Republic will again be partnering with major UK game developer conference Develop: Brighton, 11th-13th July, and in addition, Game Republic MD Jamie Sefton will be chairing a special business panel with the first two panelists confirmed Bobby Thandi (XR Games), Simon Iwanisak (Red Kite Games) and more speakers to be announced shortly.

Northern Lights will celebrate Game Republic’s 20th anniversary this year and will be looking at the factors that drive success for games companies in Yorkshire and The North and the incredible history of games making in the region. Looking to the future, Jamie will be asking panelists to share their insights and what they will be doing to support sector success going forward. Game Republic members will get a 10% discount on Early Bird tickets if they book before 6th April 2023 using the code KMDHCK 

“As a region, we have great successes to share and examples of how companies can collaborate with each other, with educational institutions and suppliers through networks to enhance their business,” says Sefton. “Our partnership and this panel with Develop: Brighton will be another great way for us to mark our 20-year anniversary.”

picture of Simon IwaniszakSimon Iwaniszak has over 17 years of industry experience, the last 11 spent running the multi-award-winning development studio, Red Kite Games. Founded by Simon in 2012, Red Kite is now part of the Sumo Digital family of studios. Having built a reputation for delivering a high-quality service creating AAA PC/console games across varying genres, Red Kite supports multiple world-class publishing partners. Before Red Kite, Simon started his career at Rockstar working on incredible franchises such as Grand Theft Auto and Red Dead Redemption. Simon is a proud Ambassador of the games charity SpecialEffect – which Game Republic is supporting all year – and provides consultation for several Yorkshire-based universities.

Bobby Thandi wearing virtual headsetBobby Thandi is the Founder and CEO of XR Games – an award-winning VR game development studio. Bobby secures contracts from key clients such as Sony Pictures and develops key relationships with global partners such as Meta, Microsoft, Valve, and others. Bobby is responsible for attracting top tier talent as XR Games rapidly scales off the back of the hit VR game ‘Zombieland: Headshot Fever’. Bobby has won an array of awards including ‘Creative Entrepreneur of the Year’ at the 2022 Great British Entrepreneur Awards and ‘Leeds City Region Leader’ at the 2021 Northern Leadership Awards. Bobby was also a 2022 ‘EY Entrepreneur of the Year’ finalist.

Link to the business panels at Develop: Brighton here

#GR20 @developconf

Pitching Event Gets Snowed Under!

picture of David from Tencent GamesDavid Valjalo, Creative Director of Strategic Partnerships at Tencent Games joined Game Republic members online to discuss their investing in games, when heavy snow meant that most of Yorkshire and The North could not travel to the event which was due to take place at Eagle Labs, Avenue HQ in Leeds. Thanks to Zoom, nearly 40 companies were able to attend the online event which provided insider insights into how to pitch to publishers and investors.

Rob Hewson talks pitching tips

Rob Hewson, CEO & Creative Director at Huey Games also joined the session, presenting useful tips and advice to help companies pitch their games to publishers and platform-holders, such as “Start with the Art”, in that you should always have your artwork upfront in pitch decks. Jamie Sefton, a well-seasoned GDC attendee heading to the event as part of a DIT trade mission, then shared his tips for looking after yourself and making the most of the event, such as buying the cheaper GDC Expo Pass and checking your meeting locations to make sure you arrive on time.

At the event Jamie also announced a special bonus webinar on 23rd May with Valve. Find more info and links in the Event Calendar.

Thanks to our 20th Anniversary Official Partners: Barclays, Red Kite Games and Escape Technology #GR20

To get FREE access to Game Republic events – join Game Republic

Game Republic’s Jamie Sefton celebrates incredible Games Industry in Barclays video feature

Jamie Sefton, MD of Game Republic has declared Yorkshire’s friendliness, location and social scene as a good reason for businesses to set up in Yorkshire and The North in a feature about Game Republic by Barclays.

The feature which is now live on Barclays’ Games Hub focused on the heritage and legacy of the network as well as what is lined up for the 20th Anniversary year which has been supported by Official Partners Barclays, Red Kite Games and Escape Technology.

Jamie Sefton with a banner with Official Partner logos

Jamie outlines the forthcoming programme of events being supported by Official Partners Barclays, Red Kite Games and Escape Technology

When asked about the work of Game Republic “Events are just the tip of the iceberg,” Jamie explained to Elaine Dowman, Barclays Head of Games and Creative. He went on to explain how much of the support provided to Game Republic members is behind the scenes, introducing companies to publishers, platform-holders, Universities and colleges to industry speakers and helping all the companies to “listening and meeting companies to help them to get the support they need that will make a big difference to their business.”

Commenting about the support of Game Republic’s work, one of the companies that helped to establish Game Republic in 2003, Revolution Software’s Charles Cecil recently said “Revolution has gained so much from our membership whether it’s having the opportunity to meet and speak to key industry representatives (one deal led to many millions of pounds of business); learn of new services; share ideas and opportunities with like-minded colleagues; and so much more. Steering a perfect balance between business and social, we are blessed to have such a brilliant organisation to champion, advocate, and support developers in the Yorkshire and the Humber region. Raising a glass to the next 20.”

Jamie’s passion for the region and how supportive the industry is to each other shone through the interview as he explained how he had been helped by larger companies like Sumo in the early stages of making the network independent after he was made redundant.

“We are lucky to have companies like Team17 and Revolution who have helped keep wealth within the region.” He continued, stating that the power of the ecosystem is key to success in Yorkshire and The North. He highlighted events like the Student Showcase that enhance talent. With GaMaYo which is managed by Game Republic and events like Leeds Games Toast led by Andrew Crawshaw, he emphasised that the support and the friendliness in the region is a good reason to set up here and to join Game Republic. “Bigger companies, Affiliates and Universities supporting the smaller companies has always been at the heart of Game Republic.”

The next Game Republic business networking event is a pre-GDC special on pitching and securing business at events courtesy of Barclays Eagle Lab at AvenueHQ in Leeds 
David Valjalo, Creative Director of Strategic Partnerships at Tencent will present opportunities for developers and have a Q&A session on pitching to investors. We’ll also have a Q&A with Rob Hewson, CEO & Creative Director at Huey Games, about how they pitch to publishers at GDC. Event produced as part of the 20th Anniversary supported by Official Partners Red Kite Games, Barclays and Escape Technology! Book here

If you would like access to this event and all Game Republic events for the year for FREE – please get in touch about joining.

 

 

 

 

Game Republic Pitching Event, Thursday 9th March, Online

UPDATE! This event now takes place online via Zoom at 4pm.

The next Game Republic business networking event is a pre-GDC special on pitching and securing business at events courtesy of our Official Partners Red Kite Games, Barclays and Escape Technology!

David Valjalo, Creative Director of Strategic Partnerships at Tencent will present opportunities for developers and have a Q&A session on pitching to investors. We’ll also have a Q&A with Rob Hewson, CEO & Creative Director at Huey Games, about how they pitch to publishers at GDC.

Game Republic’s Jamie Sefton will give some top tips when attending GDC and international events. 

If you would like access to this event – and all Game Republic’s events for the year – please get in touch about membership.