British developers actively use the right to tax benefits. In 2020, the studios received £180 million ($247 million) in compensation from the state. This is 48% more than in 2019.
According to the UK Tax Office, 350 developers with 640 games participated in the program over the year. Moreover, the amount of payments for the lion’s share of companies (87%) exceeded £500 thousand or $686.4 thousand. This is also more than a year ago.
The Video Games Tax Relief (VGTR) program was launched in the UK in 2014. It allows local studios to cover 20% of the production costs of the game.
To get a benefit, developers need to comply with a number of conditions. In particular, they must prove to the British Film Institute that their game has cultural value for the country. During the entire existence of the program, the authors of 1640 games have managed to do this
Recently, the authorities of Italy and Australia reported on the upcoming launch of similar initiatives. The Australian program starts in July 2022 and will offer local developers a 30% tax deduction. It is not yet known when the Italian project will start working, but its participants will be able to claim a 25% deduction.
Recall that last year video games brought the UK a record £4.4 billion ($6 billion). We are talking only about spending by British gamers.