Writing exclusively for Develop, CEO Jo Twist hails the long-awaited arrival of video games tax credits for British developers
Mark this date in your diaries, because it is pretty momentous. Today we had the long-awaited news that the UK games industry now has the much-needed tax breaks that our sector deserves to better compete on a level playing field. This is clearly amazing for UK developers and the industry at large, and we’re delighted to have been part of a collective effort to get the reliefs in the bag.
I was only three months into this job when the Chancellor made his announcement that games, fancy drama, and animation would be given the same tax breaks that the British film industry has so clearly flourished on. Elation was followed quickly by sighs of muted and not so muted frustration when, while the animation and fancy telly schemes were waved through, the EC decided to put the games scheme under a full investigation.
To be fair, they were doing their job: they did the same before greenlighting the film tax credit. They needed more evidence that there was a market failure in culturally British or European themed and made games. But that was when the protracted back and forth began, and we have to remember the role that our government played in this – they were tenacious and always in contact to make sure we were all answering any questions the EC had with robust, evidence-based arguments, to make the strongest, most undeniably convincing case possible.
These tax credits will level the playing field and lower the risk for many of our studios to focus on their own, uniquely British IP, made by people living in the UK. We may even be able to tempt those who have flown to Canada to fly back home.
And today we celebrate that all our collective efforts and work have paid off.
We know that hundreds of voices have been involved in this very long, sometimes bumpy, push to get this scheme through. Our role as UKIE has been to use our dedicated resources to reach far and wide within and beyond our membership, across our network, up and down the UK, to gather and funnel your collective intelligence so we could represent and sense check what such a scheme should look like for our sector, a sector which is uniquely different to film and TV in particular.
We’re delighted that many of the unique measures that we pushed hard for are included in the final scheme. This includes:
- The cultural test recognising that some games are made in locations and with characters that cannot be determined – in fantasy or abstract settings, for example, but yet are definitely British or European in concept and the way they act.
- The ability for games businesses to claim for ongoing development (ie iterations of games and DLC), recognising that games are turning into a service and not just a product that is released and left.
- That there should be no barriers to entry – this means no minimum budget threshold (as they have in France) which means that even games developed on the smallest budgets can qualify (f they pass the cultural test).
Having this scheme be inclusive, easy to administer, easy to access for all businesses, of all sizes – including businesses made up of sole developers – was first and foremost in our minds. We are confident that the measures we pushed reflect the hugely diverse way games are made today.
Our nation is the most creative and entrepreneurial in the world, as well as the most hungry to fulfil the cultural and economic potential that our sector has to offer.
Millions of people all over the world are even hungrier for the uniquely British and European games that will be made as a result. We already have some brilliant examples that are global success stories, but these tax credits will level the playing field and lower the risk for many of our studios to focus on their own, uniquely British IP, made by people living in the UK. This means more brilliant, diverse, globally appealing games, and, ultimately, more studios providing jobs because they might just be able to grow, as well as more inward investment. We may even be able to tempt those who have flown to Canada to fly back home.
Tax breaks are just another level. There is a lot of gameplay left if we want to get back to the top of the global leaderboard of development once again.
Whilst it’s good to pause to celebrate we now need to focus on making the very most the new relief.
UKIE have UK-wide roadshows planned starting from April with a team of experts from accountants, lawyers and the BFI who will be administering the cultural test to make sure every single developer and developer in waiting in this country knows what it means for them. We’ll be announcing more of these over the next month and more intensive workshops so keep an eye out for one near you.
Tax breaks are just the second level (level one was getting computer science back onto the school curriculum to ensure we have young programmers coming through the ranks, an achievement we unlocked through the Next Gen Skills campaign). There is a lot of gameplay left if we want to get back to the top of the global leaderboard of development once again.
We have big strategic plans for the next two years, beyond this important day. The world’s eyes will be truly on us now, and investors and others will have more cause to sit up and pay attention. Besides the work we already do with the UKTI on trade missions, and helping SMEs to exhibit for free as a collective at GDC, GameConnection and Gamescom, we are looking at other measures we need.
Combined with fixing the skills gap from school age and beyond, we want to unlock access to international markets; we want to make sure you have agility and ability through dedicated training that suit you and your business needs; we want to measure our value and the impact of these policy interventions with real, representative data so we can see where our sector needs help or where it is flourishing and leading the way. We are already identifying and working on other outdated policies that get in the way of ideas, creativity and business. We want to change the way cultural institutions and public pots of money work for our sector; and we want to put a nail in the coffin of that negative perception born out of ignorance about our fantastic sector in mainstream media. Our only purpose is to do what you ask us: our door is always open.