TIGA Submits Autumn Budget Proposals, Calls for Enhanced Video Games Expenditure Credit (VGEC) to Boost UK Games Industry

TIGA, the trade association for the United Kingdom video-games sector, has formally submitted its policy recommendations for the 2026 Autumn Budget, calling for substantial enhancements to the Video Games Expenditure Credit (VGEC). The proposed reforms aim to strengthen global competitiveness, stimulate high-skilled jobs and deliver wider regional economic growth across the UK creative economyTIGA. The Autumn Budget is scheduled to be published on 28 October 2026.

Supported by an economic-impact study produced in partnership with the University of Portsmouth, TIGA has released a comprehensive package of targeted reforms. The UK games industry is currently facing head-winds: competing nations offer more generous tax incentives for game production, putting the UK at a disadvantage for inward investment. Domestic studio formation has fallen to a 15-year low, while sector-wide employment has declined, ending a 14-year expansion cycle. Small-and-medium independent studios repeatedly report pain-points around constrained access to finance and unpredictable cash-flow. TIGA’s submission advocates for a dual-track approach combining improved tax relief and dedicated growth-capital funding mechanismsTIGA.

I. UK Games Industry: Achievements and Structural Pressures

The UK hosts Europe’s largest video-games industry. Joint research by TIGA and the University of Portsmouth quantifies the sector’s economic footprint: it generates £12 billion Gross Value Added (GVA) annually and contributes £2.2 billion in tax receipts. The industry demonstrates strong high-skill, regional-spread and export-oriented characteristics: 80 percent of the workforce holds degree-level qualifications or higher; 78 percent of employees are located outside London; and 95 percent of UK studios generate export revenue from overseas marketsTIGA.

Nevertheless, recent metrics signal a cooling industry cycle. For the 12-month period ending September 2025, only 137 new game studios were founded–a 15–year trough. Over the same timeframe, industry employment contracted by 4.5 percent, bringing to an end 14 consecutive years of jobs growth. Many independent SMEs struggle with limited financing options, slow tax-claim turnaround times, and regulatory uncertainty around whether post-launch DLC and live-service update expenditure qualify for tax relief. Additionally, rival territories including France and Canada operate more generous games-tax regimes, creating risk of inward-investment diversion away from the UKTIGA.

The current VGEC regime entered full force April 2025. The baseline headline relief rate stands at 34 percent, capped at 80 percent of a project’s qualifying core expenditure. Projects must pass the BFI British cultural test to become eligible for the creditGOV.UK.

II. Full Policy–reform Proposals from TIGA’s Budget Submission

TIGA’s submission covers five major workstreams: differentiated VGEC relief rates, expansion of qualifying-cost categories, statutory clarity for post-launch development spend, streamlined HMRC claim-processing KPIs, and creation of a dedicated industry Scale-Up Fund. Every proposal is paired with modelled forecasts for incremental GVA and job creation.

1. Introduce a “Games Growth Relief” tiered credit for smaller–budget productions

A higher preferential relief band targeted at lower-budget game projects:-Option A: Apply a 53 percent credit rate against 80 percent of qualifying expenditure for projects with budgets up to £15 million. Modelling predicts this measure would lift sector-level GVA by £434 million and create 6 264 jobs, including 807 dedicated development roles.-Option B: Extend the 53-percent preferential band up to a £23.5 million budget cap, with a gradual taper down to the standard 34-percent rate above that threshold. Forecasts show this variant could boost GVA by £482 million and deliver 6 952 jobs, of which 896 are development-focused positionsTIGA.

2. Raise baseline VGEC percentage and expand the share of eligible expenditure

1. Increase the universal standard VGEC relief rate from the existing 34 percent up to 39 percent. Economic modelling estimates +£436.2 million additional GVA and 6 291 incremental jobs (760 developer roles).
2. Lift the maximum proportion of qualifying core expenditure eligible for relief from 80 percent to 100 percent. This delivers the largest projected economic impact among standalone proposals: forecast GVA uplift of £731.7 milliontogether with 10 551 new jobs, including 1 292 development-sector positionsTIGA.

3. Broaden the scope of costs that qualify for VGEC

1. Bring tangible capital assets (production hardware, servers), debugging and QA expenditure, plus community-management operations inside the list of allowable costs.
2. Lower the existing 10-percent UK-core-spend threshold, to make the UK more attractive for international outsourced game-development work.
3. Explicitly confirm that new development expenditure incurred after a studio acquires an existing finished game titlecan qualify for VGEC claims on those incremental costsTIGA.

4. Statutory confirmation that post–launch DLC and live–service development costs qualify for relief

Many independent studios rely on post-release downloadable-content packs and ongoing live-service updates to sustain revenue and community engagement. At present, there remains regulatory ambiguity whether these costs fall inside VGEC eligibility. TIGA requests formal government clarification confirming that DLC and post–launch iterative–development expenditure qualify for VGEC. This change would be especially material for SMEs running live-service games, smoothing cash-flow across the full product lifecycleTIGA.

5. Introduce a formal 40–working–day KPI for HMRC claim–processing

TIGA recommends HM Revenue & Customs adopts a binding service-level target: the vast majority of VGEC claims should be fully processed within 40 working days. Faster claim settlement improves cash-flow predictability for studios and mitigates liquidity risks that disproportionately impact smaller development teamsTIGA.

6. Establish a dedicated Games Scale–Up Fund

Adopting a concept originated by the UK Video Games Council, TIGA proposes a co-investment growth fund. It targets studios with commercially released titles and proven early-market traction, deploying £500 k to £2 million per project in late-seed and Series-A capital. The fund would operate on a co-investment model: two-thirds of capital originates from British Business Bank’s Enterprise Capital Funds, while one-third is matched by private-sector investors. The British Business Bank would invest directly into the fund vehicle, filling a recognised financing gap for mid-stage UK game-studio expansionTIGA.

III. Key Quotations from TIGA Senior Leadership

Dr Richard Wilson OBE, Chief Executive, TIGA

“The UK hosts Europe’s largest video-games sector. Our joint research with the University of Portsmouth demonstrates that our industry delivers £12 billion in GVA alongside £2.2 billion in tax revenues. The sector is a powerhouse for high-skilled jobs, regional growth outside London and export-led commerce. Enhanced VGEC incentives can deliver tangible, measurable growth. For instance, introducing a 53-percent relief rate for projects up to £15 million would generate more than 6 200 high-skill jobs and add £434 million to UK GVA. Widening qualifying costs, confirming eligibility for post-launch DLC development, and targeting a 40-day claim-processing window will provide a major boost right across the ecosystem, including small and independent studios.”TIGA

Elaine Green, TIGA Chair & CEO, NellyVision

“The UK possesses an extraordinarily talented community of game creators. But creativity and talent require favourable commercial conditions if they are to evolve into sustainable, scalable businesses. For independent developers in particular, access to finance and predictable cash-flow separates mere survival from the capacity to invest, hire and grow. Upgrading VGEC represents a practical, powerful tool for government to back UK game-making. Higher relief for lower-budget projects, broader qualifying-cost definitions and support for post-launch live-service work will enable studios to invest with greater confidence and build durable long-term enterprises. We want the UK to remain among the very best global locations for video-games development. A competitive, ambitious VGEC regime paired with improved growth-finance access will send a powerful signal of government ambition for our sector.”TIGA

IV. Industry Significance & Outstanding Policy Constraints

Strategic value of TIGA’s proposals

1. Rebuild tax competitiveness for global inward investment: Tiered enhanced relief narrows the policy gap versus competing jurisdictions such as Canada and France, helping attract international projects and outsourced development work into the UK.
2. Redirect support toward independent SMEs: Preferential higher credit rates for small-budget projects rebalances a system that historically tends to benefit larger-budget productions, potentially reversing the downward trend in new studio formation.
3. Align tax policy with modern live–service business models: Bringing DLC, post-launch iteration, server hardware and community operations into scope recognises how contemporary games generate value across multi-year lifecycles, rather than only during initial production.
4. Combine tax incentives and equity capital: The package pairs cash-flow support via tax credits with a dedicated growth-equity instrument, covering needs spanning initial project development all the way through studio scale-

Important caveats

This document constitutes industry–association recommendations submitted to HM Treasury, and does not equate to government-adopted policy. In a written parliamentary answer dated June 2026, HM Treasury stated it was not actively considering increases to the VGEC headline rate or qualifying-expenditure caps at that moment. Whether any of TIGA’s suggestions will be enacted will only become clear upon publication of the Autumn Budget on 28 October 2026UK Parliam….

There are inherent fiscal trade-offs: more generous tax credits increase near-term tax-expenditure for the Exchequer. TIGA’s economic-impact model argues reforms will generate offsetting extra GVA, employment and future tax receipts, yet the Treasury will weigh these projected long-run benefits against immediate public-finance constraints.

Conclusion

Against a backdrop of falling new-studio incorporations, contracting employment and intensifying cross-border tax competition, TIGA has laid out a holistic set of VGEC reform proposals ahead of the 2026 Autumn Budget. The submission introduces tiered relief for smaller-budget productions, expands eligible cost categories, clarifies treatment for post-launch live-service work, imposes claim-processing service-level targets and complements tax policy with a proposed co-investment Scale-Up Fund. The core design principle is to bring UK games tax support in-line with modern live-service commercial realities while tilting resources toward independent creators. Industry stakeholders will closely watch the 28 October Autumn Budget to assess which, if any, of TIGA’s recommendations will be taken forward by HM Treasury.

Supporting research: Economic Impact Assessment of the UK Video Games Industry (TIGA 2025), authored by Professor Homagni Choudhury, Professor Joe Cox and Dr Alan Leonard, University of Portsmouth. About TIGA: The trade association for the UK video-games industry, whose mission is to make the UK the best place on Earth to develop video games. TIGA undertakes policy advocacy, education accreditation, industry awards and practical business-growth support for studios. Official website: www.tiga.org