UK Video Game Industry Faces Limited Relief with New Expenditure Credit

The upcoming Video Games Expenditure Credit has raised concerns among industry leaders, with TIGA urging the UK government to revisit the incentive to better support the sector. Despite promising a 34% rate of relief on 80% of qualifying expenditure, the credit is claimed as an income receipt, subject to Corporation Tax, effectively equating to only a 0.5% increase over the current 25% relief. Furthermore, the new credit will no longer include European expenditure and will remove the £1 million sub-contracting cap, limiting qualifying expenditure to goods used or consumed in the UK. TIGA CEO Richard Wilson emphasized the need for reforms, including enabling connected party profits, simplifying the claims process, and providing clearer guidance on eligible expenditures. To address these concerns, TIGA has proposed three key reforms: adopting the same pricing rules as the current Video Games Tax Relief, simplifying the claims process to make it more accessible to smaller companies, and providing more guidance on what constitutes 'used or consumed in the UK' to alleviate uncertainty within the sector.