Forest of Fun

Claire's Personal Ramblings & Experiments

Exporting Investment: The Case For and Against VGEC

 micro

TLDR: We are very quick to hand companies tax breaks. I would rather move the same money from corp structures like VGEC into personal tax credits for UK residents earning in strategic creative sectors. More transparent, survives job moves, makes UK freelancers more affordable and catches the indies VGEC misses. People first, because this industry is built entirely on talent.

Right off the bat I want to praise VGEC because it is vital for our industry but I think this lovely support could be improved. Also for those of you unaware our creative industries are massive. Bigger than life sciences, aerospace and automotive combined. UK players spent £8.76 billion on games in 2025, more than home video and music combined, and the games industry generates somewhere between £6 billion and £12 billion in GVA a year depending who is counting. The wider creative sector is 5.5% of the whole economy and growing roughly four times faster than the rest of it.

So we are not talking about a niche. We are very quick to give companies tax breaks but I would much rather see investment in UK talent directly. Instead of giving companies a tax break it would be much more direct, flexible and investor friendly to move from a corp tax structure like VGEC to personal tax credits.

Put the Credit in the Pocket

If a UK resident taxpayer is working on creative projects like film, games and so on, move the tax break into their pocket on income earned in strategic sectors. This does a few things:

  • Much more transparent. No creative accounting, no bad practice money shuffles.
  • Survives job moves. The credit follows the person not the company. Studio goes under, you keep the credit.
  • Makes UK freelance talent more affordable. Hiring British becomes the cheap option.
  • Supports start ups. Project based funding and indie projects are often missed by VGEC entirely.

The Counterpoints

The honest counterpoint is that businesses are better at lobbying than individuals, and the ghost of immigration gets dragged out. Now personally I think it's largely bullshit and I would welcome talented people moving to the UK, becoming resident and growing our knowledge base. Though if you want to bang that national drum we already have a gated structure around student loans and residency length which provides a ready made framework for this.

The Core Creative Fallacy

Ultimately the trend is "core creative" in the UK with outsourcing abroad or to automation. This fallacy assumes only leadership are creative. It provides no on-ramp to train new talent, no investment in existing people, and it exports expertise, investment and opportunity abroad.

I would much rather a foreign games company funnel money into our industry and find it easy to bring on UK talent than a UK company become a hollow shell of its former self, effectively brand washing foreign co-dev studios.

People First

This industry is built entirely on talent. IP, brand and all that bollocks dies away. The only brand that actually endures is Brand UK itself. Our music, telly and games are half the reason anyone gives a toss about this island, and that soft power was built by people, not holding companies.

Our great art booms were enabled by supporting people. The struggling artist between gigs. The musician on the dole while touring their early sets. Government money into the BBC Micro and education which seeded a generation of games programmers.

A people focused approach is the same amount of investment, more direct, and the best part is it's far easier to track. Follow the effective lifetime tax return on a person over a decade or two and show everyone exactly how much money comes back. We already know this maths works. Ukie's own numbers on the old VGTR showed £4 back in GVA for every £1 invested. Imagine how much cleaner that sum is when the £1 goes straight into a person's payslip.

Conclusion

If the money is meant to grow the UK games industry put it where the industry actually lives: in the people making the games. Credit the person, not the structure. Everything else is brand washing.

PS: If You Qualify, Go Claim It

None of this grumbling means you should skip the support that exists today. If you are a UK dev and not claiming VGEC you are leaving money on the table.

You qualify if:

  • You are the video games development company: the UK company responsible for the design, production and testing of the game
  • The game is certified as British by passing the BFI cultural test (16 of 31 points, easier than you might think)
  • The game is intended for supply to the general public
  • It is not made for advertising, promotional or gambling purposes
  • At least 10% of your core expenditure is UK expenditure

How to apply:

  • Apply to the BFI for British certification: an interim certificate while the game is in development, a final certificate once it is complete
  • Claim through your Company Tax Return (CT600) with the additional information form to HMRC
  • The credit is 34% of qualifying spend, capped at 80% of core costs, and taxable, so the net benefit works out around 25.5%

Seriously, go claim it. The paperwork is lighter than you fear and your accountant has probably done one before.

Links

Tax credits mentioned

Figures

The BBC Micro boom

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