You’ve probably heard about the R&D tax credit scheme and you’ve probably been called a few times ...
THE RISE OF ESPORTS & VGTR
10 September 2021
FORTUS AND VIDEO GAMES?
Video games and tax. Not an obvious connection, but thanks to the Government’s Video Game Tax Relief scheme the development of video games is now incentivised for companies who pass certain British or EEA cultural criteria.
HOW FAR VIDEO GAMES HAVE COME
One of the first video games was Tennis for Two; a simple back-and-forth tennis-style game released in 1958. The game didn’t even have a dedicated screen! Fast forward to today and the European video game industry is worth €23.3 billion; the world of Fortnite and League of Legends is a far cry from the pioneering Tennis for Two.
The perfect illustration of how far the gaming industry’s come is the upsurge in Esports participation and viewership. Esports aren’t just a game; professional teams now exist which include coaches, analysts and managers all working together to claim the titles of numerous tournaments – with immense prize pools.
WHY ESPORTS ARE NOW IN THE MAINSTREAM
A gaming equivalent of the Premier League, known as the ePremier League, pits elite gamers against each other in the latest EA Sports FIFA titles. Teams such as Liverpool FC, Manchester United FC, and Chelsea FC all invest in Esports talent to compete for the coveted ePremier League title.
Recent figures from Statista state that there were 435.9 million viewers of Esports in 2020 and predict that by 2024 there could be as many as 577.2 million viewers – roughly 1/13 of the global population!
The adoption of Esports has developed at a rapid rate, even more so because of how the industry remotely operated during the midst of the pandemic. With this increasing popularity, the opportunity for tax incentives is now an essential tool in the armoury of a game developer studio.
Esports are at the forefront of innovation; see it as the Formula One of the gaming spheres. To keep up with the drive to be better, video gaming companies need to be at the cutting edge of development and, therefore, need every possible advantage on their side. The advantages start with the UK government’s tax relief incentives.
WHAT’S VIDEO GAME TAX RELIEF?
Video games are the 3rd biggest claimer in the Creative Industries; this is a further indication of the continuous rise in the popularity of gaming. Fortunately for game developers, the government is keeping up with the pace of the latest gaming pioneers as tax relief incentives are now available.
The Video Game Tax Relief (VGTR) incentive encourages the future development of the gaming industry by allowing companies to claim tax relief on qualifying work, reducing their tax bill or reinvesting in future gaming advancement.
According to HMRC figures, since its inception in 2014 to 2019, £709 million has been paid in relief from 1,780 claims.
HOW TO TELL IF YOU QUALIFY FOR VGTR
To qualify for VGTR, the developer must pass a point-based cultural test which is conducted by the British Film Institute (BFI).In a recent Creative Industries webinar, hosted by Fortus, guest speaker Stuart Burnside of the BFI had a clear message for potential VGTR claimers – ‘don’t rule yourself out!’
There are 31 points available and 16 points would identify a claim as eligible.
HOW FORTUS CAN HELP
At Fortus, we offer full assistance to companies looking to secure Video Game Tax Relief. Whether you know for certain you have an eligible claim, or you’d simply like to investigate, our specialist R&D team can help. Even if you’ve submitted a claim already, we can advise on how to maximise the opportunity. This service applies to our entire range of 13 innovation tax reliefs to the Creative Industries.
‘There’s little to lose when applying – only a short amount of time!’
Call our specialist R&D team today on 01604 746760.
If you’d like to know more about support for the Creative Industries, you can contact one of Fortus’ expert advisors here.
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