23 Daily — According to gamesindustry.biz, on October 27, 2026, the UK Interactive Entertainment Association (UKIE) urged the UK government ahead of the Autumn Budget to modernise the Video Games Expenditure Credit (VGEC) tax relief scheme and establish new funding to enhance the competitiveness and investment appeal of the UK games industry.
Industry Proposes Specific Reforms to Address £500,000–£2 Million Capital Gap
UKIE, along with TIGA and the UK Video Games Council, proposed a tapered 'games growth' fund offering 53% support for projects with budgets up to £15 million and 39% support for projects between £15 million and £23.5 million. The fund aims to support studios of various sizes to attract more investment and boost domestic development activities. UKIE CEO Nick Poole explained that the current VGEC rule limits qualifying expenditure to 80%, restricting support even when substantial development occurs in the UK, and does not reflect modern game production models such as live-service games, downloadable content, and co-development projects.
Current Rules Pose Barriers for Certain Game Types and Development Models
Some studios report that VGEC regulations exclude much of their work, especially maintenance and updates on existing titles where they are not the lead developer. Mobile and non-narrative games often struggle to pass the cultural test despite being significant British-developed products. Indie developers face challenges raising capital to move from prototypes to full production. While the UK government launched a £30 million fund last year, providing grants up to £250,000 to indie studios, there remains a funding gap for studios seeking to scale beyond early-stage financing.
Calls for a Games Scale-Up Fund to Drive Sustainable Growth
UKIE advocates for a Games Scale-Up Fund to bridge this gap, supporting promising studios to expand, retain intellectual property, and attract additional private investment. The proposed fund would operate through a co-investment model involving the British Business Bank and private investors, for example, a £50 million fund with approximately £33 million public and £17 million private capital. Rebellion co-founder and CEO Jason Kingsley endorses these measures, noting their potential to help UK developers grow, create jobs, and compete internationally.
Editor's take: Tax Reform and Growth Capital Vital for UK Games Competitiveness
With countries like Canada, France, Ireland, and Australia offering games tax incentives up to 30% or more, the UK faces strong competition for game development projects and talent. Without modernising VGEC and closing funding gaps, the UK risks losing skilled jobs, intellectual property, and investment. The UKIE-backed reforms recognize the diversity of contemporary game production and the need to support studios at multiple growth stages. Entrepreneurs should monitor these policy developments closely to align their projects with evolving funding opportunities and maintain competitive advantages in the global market.