Financial Aid for Indie Developers in UK Games Industry

The European Union Commission has reached a decision to grant the UK’s games industry cultural tax relief, a move which trade bodies estimate could result in an extra £188 million per year for the sector.

UK Chancellor George Osborne has welcomed the decision following an investigation into the relief by the Commission in order for it to receive state aid approval.

As it stands, the UK video games industry had sales of £2.19 billion in 2013. It already numbers about 500 development studios and employs about 9000 staff. Most games development studios are SMEs and the tax relief, which came into effect on 1 April 2014, will help the industry to grow further and create new jobs.

Commenting on the decision by the Commission, the Chancellor said:

❝This is a key industry of the future and I want Britain to be one of its biggest centres. 95% of UK video games companies in the UK are SMEs.

This relief is one of the most generous in the world and will help them to grow, creating new jobs for hardworking people.❞

It is estimated that the relief will provide around £35 million of support a year to the sector. Meanwhile, the industry is hopeful that a similar direction will be taken in regards to UK lottery funding. Currently, whenever you play the lottery, you know that some of the cost of your ticket will go towards good causes, and so even if you don’t win anything for yourself on the lottery, at least you’ll have put a small amount of money into helping others.

One area of the British economy that has already benefited from UK lottery funding is the British film industry. The British Film Industry Fund (BFI Fund) directs more than £26m of National lottery funds each year into film development, production and distribution in the UK, and by 2017, the budget is set to increase to £30m.

With the announcement that the European Commission has fully approved that the UK video games sector will receive generous tax reliefs, the video games industry is hopeful that it may also benefit from lottery funding in the future too. Of course, this hasn’t happened yet, but with the example of the benefit that the British film industry has already received through the lottery, there’s a good chance the same may happen for the video games industry.

The UK video games industry is currently the third largest in the world, and in 2009, the profits of Britain’s video game industry exceeded those from its film industry for the first time. This means that the government has a great interest in supporting the industry and ensuring that small start-ups have every chance at succeeding.

Of course, most people who buy a lotto ticket aren’t thinking about these elements of playing the lottery. They’re more interested in the possibility of winning a huge jackpot.

Now that you can play pretty much any world-wide lottery online, it’s really easy to find out if you’ve won, by using a tool such as the UK lottery checker. And next time you look and discover that you haven’t hit the jackpot, at least you’ll know that a percentage of the money you played on the lottery will not only go to good causes but might also contribute to the development of the UK economy and the SMEs within it.

And who knows – in the future you might be able to play the lottery and support the indie developers at the same time. With the vested interest the UK government has in ensuring the industry keeps up its growth, we feel it’s only a matter of time.

Note, in order to apply for the UK video games tax relief – you need to qualify your video game as British under the cultural test for video games. Once the legislation has gone through Parliament later in the year, companies will be able to submit tax relief claims with HMRC and they will be able to do this on expenditure backed-dated to 1 April 2014.

We strongly recommend that Indie Developers look into this at their earliest opportunity!

the author

He’s a cat. He likes to play video games. He often has a hard time with this since he’s a gamer cat living in a gamer human world, but he gets by.