Money is one of the principal challenges facing video game developers. According to research conducted by the games trade association TIGA, a lack of access to funds is a significant challenge for over half the developers in the United Kingdom. While the group recommended the creation of a video game investment fund to help alleviate that problem, it has also been busy looking into alternate means developers can use to help shore up their finances.
TIGA says that R&D Tax Credits and Games Tax Relief can be important sources of finance for those involved in the games industry in the UK. Based on a survey of fifty-two Britain-based games development companies, key findings from the survey include the following:
- 75% of respondents successfully claimed R&D Tax Relief over the previous 12 months.
- Of the 75% of respondents who successfully claimed back R&D Tax Credits in the previous twelve months, the average percentage of total costs claimed back was 22%.
- 25% of respondents still do not claim for R&D tax credits, most of whom (69%) are small and micro companies.
- 62% of developers submitted a Games Tax Relief claim in the last 12 months.
- 81% of respondents indicated that they intend to submit at least one project for Games Tax Relief in 2017, and it is likely that some intend to submit more than one.
“The principal challenge holding back games developers is difficulty in raising finance,” said Dr. Richard Wilson, CEO of TIGA. “Developers can make life easier by using relevant tax reliefs: principally Video Games Tax Relief and R&D Tax Credits. Our research shows that studios successfully claiming R&D Tax Credits are on average claiming back over a fifth of their total costs. Likewise, Games Tax Relief allows studios to claim 25% of qualifying games production expenditure as a corporation tax credit with no minimum or maximum expenditure. These reliefs effectively reduce the cost of development and allow studios to invest more in studios, staff and games.”