The BFI has published a major report on the economic impact of the screen sector tax relief incentives, its first since 2015.
The report, entitled 'Screen Business', demonstrates the scale of the UK games industry, as a key part of the screen industries, with overall workforce and development spend significantly incentivised by VGTR, stimulating growth in the UK economy.
Luke, our Insight & Innovation Manager, worked over the last year as part of the Steering Group on the report, providing detailed data from the UK Games Map and analysis to show that UK-developed games accounted for 17% of sales revenues across the UK physical and digital retail.
The report takes data from the financial year 2016 (the Video Games Tax Relief system started in that the UK games industry in April 2014) and shows that the games industry directly employed 20,430 people and contributed £1.52bn in GVA to the UK economy. With indirect economic and spillover impacts included, these numbers rise to show the industry supporting 47,620 jobs and contributing a total of £2.87bn in GVA.
The report, Screen Business: How tax incentives help power economic growth across the UK, produced by Olsberg SPI and Nordicity, and commissioned by the British Film Institute, examines the contribution to the economy of VGTR and the other vital UK screen sector tax reliefs. It drills down into the total economic impact of the UK games industry, including detailed assessments of the development, publishing, retail, esports and merchandising subsectors.
It has been a complicated bit of work across the screen industries, and there is a lot of data in the report. But it, for the first time, offers the games sector a full year's worth of figures for the VGTR, and therefore a useful benchmark for subsequent analyses.
Speaking at the launch event today, Minister for the Creative Industries Margot James MP, hailed the UK as a "creative powerhouse" for video games, which are "enjoyed by millions globally".
The figures show that VGTR has played an important role in the growth of the UK games development sector, with games which have benefited from VGTR directly contributing £294.1m in GVA to the UK economy, rising to £525m if indirect and spillover impacts are included.
In 2016, VGTR supported 31% of the total UK game development workforce, showing the positive impact of the relief on employment - and it's worth bearing in mind that, according to the report, without VGTR, 68% of supported games would not have been made in the UK, or perhaps not even made at all. Although these are fantastic figures to see, it reminds us that people drive creativity and innovation. So if we want to continue to be competitive globally, and see these figures continue to grow, we need to make sure we are investing in and nurturing homegrown diverse talent, as well as making sure we have an international immigration system that works for companies of all sizes. Unnecessary costs and time barriers, as well as red tape and arbitrary minimum salary requirements, may well hinder this future growth.
The UK's VGTR scheme is one of the most accessible and flexible schemes in the world. There is no minimum budget requirement, no restrictions on what platform your game is available on, or what business model your game operates. Companies can also continue to claim on incurred, qualifying costs even if the game is cancelled at any point.
For a full drilldown of the report please find out more in our press release.