On Tuesday and Friday last week, the Chancellor of the Exchequer announced a range of economic measures in response to coronavirus. TIGA, the trade association representing the video games industry, has welcomed the initial steps that the Government has taken to support businesses. The Coronavirus Job Retention Scheme and deferral of VAT for the next quarter are helpful initiatives. In creative industries like the video games industry, the biggest business cost is employment and the measures the Government has taken will enable games businesses to retain employees.
TIGA responds to economic support measures
The VAT deferral will also provide businesses more time and runway to stay in operation. However, TIGA is calling for the Government to introduce additional measures to support the UK video games industry at this critical time. TIGA has set out its 10 proposals to enable the Video Games Industry to cope with Coronavirus. Our proposals are based on feedback from games developers, publishers and service providers in the industry. In particular, TIGA is calling for the following to be addressed:
- Contractors and self-employed workers: 17.5 per cent of the UK games development workforce are contractors. The self-employed and contractors need a safety net during the current crisis. The Government could provide all contractors with a monthly income based on their average earnings over previous years. The Government could also consider making Statutory Sick Pay available for workers on temporary or zero hours contractors.
- Rent and business rates: many businesses, including games firms, face having empty premises for the foreseeable future. The Government should consider ways of relieving the cost of rent for businesses while the emergency lasts. This would reduce business costs and avoid the danger that thousands of businesses will close rather than waste money on rent. The Government should also extend the business rates holiday to other sectors to relieve pressures for at least 6 months.
- Video Games Tax Relief (VGTR) and R&D Tax Relief: VGTR is our industry’s most important Government tax measure. The Government should consider increasing the rate of VGTR and fast tracking claims for both VGTR and R&D Tax Relief.
- Encouraging Venture Capitalists (VC) to keep investing: financial market turmoil has resulted in promised VC investments evaporating. The Government should examine ways to incentivise VCs to invest in promising companies.
- Surmount the shocks: our economy has suffered a simultaneous supply and demand shock. The UK Government needs to underpin employment and deploy public spending to minimise the depth of the shock. Following the relaxation of coronavirus measures, the Government should also support economic recovery with significant investment. Public spending on health, medical production, transport, logistics, infrastructure, promoting employment and incomes.
Dr Richard Wilson OBE, TIGA CEO, said: “We welcome the steps taken by the Government to support British businesses in this unprecedented emergency but we would encourage them to go further by providing a safety net for the self-employed. Approximately one sixth of the UK workforce is self-employed, freelance or working on zero hour contracts. 17.5 per cent of the UK games development workforce are contractors. “TIGA has recommended 10 points for the Government to consider in order to enable our high skilled, high technology and export focused industry to survive, revive and thrive. The Government should provide further support to self-employed workers and additional relief for businesses. The greater the levels of support now, the quicker our industry will be able to get back on its feet and create jobs, content and businesses once the crisis is over.”