The gaming and apps industries in the UK
As of 2018 there were over 2,200 active games companies in the UK games industry and the sector was estimated to be worth £5.11bn in 2017. The area with the biggest sales growth was the ‘digital sales’ (downloads that don’t require additional software, such as a disc, to operate) for consoles, the PC and mobile devices. This means that the development of games and bespoke applications (‘apps’) is an extremely lucrative market. The right idea, with the right advertising and device placement can potentially see a huge return on investment for app developers and game developers alike.
However, with the ever growing interest in new games and apps, the market can be a difficult one to break in to. If a company is to stand a chance in such a competitive environment, a decent amount of time and effort must be invested into researching and developing a product.
As with any business venture, cost can become an issue, especially when you are in the pre-sales stage of development. Minimising your outgoings and costs is vital to ensure a healthy development period can be implemented and sustained.
R&D for games and apps
The Research and Development (R&D) of games and apps may qualify for relief under the R&D Tax Credits Scheme. This is an initiative that could see your tax bill reduced by a certain percentage, depending on how much you spend on R&D, and how much of those costs qualify under the scheme.
When looking at the costs and calculating elements that could potentially be eligible, consideration may be taken in to account for staff, utilities, bespoke hardware and software licenses. The definition of ‘research and development’ for the purposes of this scheme is fairly broad, and for an app developer or game developer it is likely that the project will be covered by this scheme due to the definition of the job title – there is ‘development’ of a product.
Areas of games and app development that could be covered by the R&D definition:
- Research into the software you use or plan to be using
- Games or app development as a general whole
- Advancing current technology with new innovations or inspirations
R&D tax credits
It should be noted that R&D Tax Credits are classed as state aid. If a business has applied for the Video Game Tax Relief (VGTF) and are a small or medium business, then it should be noted that businesses cannot claim for both schemes. The rules are different for large companies, which may still be eligible as R&D tax relief claimed under these schemes is not counted as state aid. However professional guidance and consultation is recommended if you plan to apply for more than one scheme to work out what reliefs will give you the greater benefits.
Easy R&D assist in making tax credit claims for the R&D Tax credits scheme, and can help you discover what parts of your project are eligible for tax relief. We ensure you receive all the benefit you are entitled to. Get in contact and see how much they can save you.
Easy R&D have helped hundreds of companies to make R&D tax relief claims. Contact your nearest R&D Consultant to see if you can claim on 0800 195 7516.