Make sure your games business is counted in official statistics
The Creative Industries are worth an incredible £10m per hour to the UK economy, according to the most recent government statistics: games are a huge part of that and will continue to grow.
But there are still some issues with the baseline data used to count the games sector's contribution to these figures and we can do something to change this.
According to research that we published with Nesta, only one third of UK games businesses are identified in the ONS Business Register on which official government statistics depend.
This creates an undervalued picture of the UK games sector. These official statistics are important as they are often used to decide which sector might need public support, where that support can be best applied and how existing measures (such as tax relief) are achieving their aims.
Why has this happened?
One reason is that your business might not be correctly classified on the ONS business register, that’s something you can change. Another possible reason is because ONS business surveys don’t include microbusinesses – that’s a gap for the statisticians to solve when they produce their estimates.
Every industrial sector in the UK is allocated some Standard Industrial Classification codes (or SIC codes). Data collected under these codes are then added up to calculate the overall economic size of each sector.
SIC codes are attributed to businesses in a number of ways, often by matching key words from company descriptions. This is often inaccurate and results in games business being allocated the wrong the code or sometimes simply not being allocated a SIC code at all.
We worked with DCMS and ONS who have provided a list of descriptions that games businesses can now use in registers that will ensure they are attributed to the right SIC code (see below).
Which kinds of games businesses does this apply to?
If the main activity of your business is either developing games or publishing games then you should check that you have been allocated the right SIC code.
Which SIC codes should game businesses have then?
If the main purpose of your business is either developing or publishing video games then make sure that your business is being allocated one of the following SIC codes. If your business does both you’ll need to choose if you are more of a publisher or a developer:
- 58.21/0 Publishing of computer games
- 62.01/1 Ready-made interactive leisure and entertainment software development (that’s games development)
How can you check if you’ve been allocated the right SIC code?
You can’t directly check the ONS business register, because it’s confidential, but a good way of checking is with Companies House whose info will be similar.
How can you make sure your business gets the right SIC code on the ONS business register?
SIC codes are taken from 4 different sources in the following order of importance and if possible we recommend making sure that your business has the right code in all four sources:
- The Business Registers and Employment Survey (BRES) An annual survey sent out to a sample of 80,000 businesses. All large businesses with 2.2m UK VAT and/or PAYE based enterprises in Britain are sampled each year. Many smaller businesses won’t receive a questionnaire annually. So, for those not included in the survey, updating the HMRC and Companies House data below is important. You will be asked to write in a description, which will then be automatically coded. You should use similar descriptions to those used by ONS in the list below to match descriptions against.
- HMRC VAT registration If you’re registering for VAT online for the first time go here or you can amend a previous registration you can just select one of the two games SIC codes above from a drop-down box of codes. If you’re using postal VAT registration: you will be asked to describe your ‘business activities’ on the registration in box 6 of this form. Here you should use descriptions similar to those in the list below.
- Annual HMRC PAYE return Use the ‘nature of business’ section to describe your business using the list of descriptions below.
- Annual return to Companies House Every company must deliver an annual return to Companies House at least once every 12 months. If you want to change your SIC code you can file an Annual Return at any time during the year – changing the SIC code as required. This change would then be reflected on your company record. The change can be done via this Companies House. Simply add one or both of the appropriate games related SIC codes above in section A3 as classification codes. You may also include a principal activity description with the keywords mentioned below. Again if you are both a developer and a publisher you should decide which takes precedence in your activities.
List of descriptions used by the Office of National Statistics.
Games businesses should use these descriptions to ensure that they are counted as part of the overall UK games sector figures.
If your businesses’ main activity is publishing games then use these descriptions (for SIC code 58.21/0 “Publishing of computer games”):
- COMPUTER GAMES PUBLISHING
- ON-LINE COMPUTER GAMES PUBLISHING
If your businesses’ main activity is developing games then use these descriptions (for SIC code 62.01/1 “Ready-made interactive leisure and entertainment software development”):
- COMPUTER GAMES DESIGN
- COMPUTER GRAPHICS
- DESIGN AND DEVELOPMENT OF GAME SOFTWARE
- DESIGN AND DEVELOPMENT OF INTERACTIVE MEDIA
- DEVELOPMENT MOBILE PHONE GAMES NON CUSTOMISED
- VIDEO GAMES DEVELOPMENT