Ukie’s policy and events officer, Grace Shin, brings us a breakdown of how yesterday’s budget will impact game businesses.
Chancellor Rishi Sunak has announced the Spring Budget, setting out the Government’s plans for weathering the continuing coronavirus storm.
It had a number of announcements that are of particular interest for the games industry. So we’ve highlighted the most relevant ones for you below to help you understand how the swathe of measures could potentially support your business.
Future Fund: Breakthrough
Financial support for later stage tech start-ups was included in the Budget in the form of a new Future Fund: Breakthrough scheme. The scheme will invest £375m of government money in UK technology companies, matched with private sector venture capital.
Future Fund: Breakthrough builds upon the Future Fund scheme of the last Budget, which provided smaller government-based loans to innovative businesses. There is a question about whether video games businesses will be covered by these schemes, which we will be seeking to clarify.
Help to Grow
UK businesses in any sector that have been operating for more than a year with between 5 – 249 employees are eligible to take part in a new Help to Grow scheme. The scheme provides access to management training, technology advice, and discounted software through two streams – Digital and Management.
The former provides businesses a discount of 50% on productivity-enhancing software, as well as advice on how to use digital tools to unlock business potential. The Management stream is a 12-week programme delivered by business schools to help leaders of small businesses develop their strategic skills.
The Budget also included a new UK-wide Recovery Loan Scheme to loan between £25,001- £10million to businesses of all sizes requiring support.
Talent and job support
Fast track visas
The Chancellor unveiled a new unsponsored points-based visa route to attract highly skilled talent to UK scale ups, while a new and improved visa processes for scale-ups and entrepreneurs was mentioned. To support what the Government term “high skilled migration the Chancellor stated that the government will:
- introduce, by March 2022, an elite points-based visa which will include a ’scaleup’ stream, enabling those with a job offer from a recognised UK scale-up to qualify for a fast-track visa.
- reform the Global Talent visa, including allowing holders of international prizes or winners of scholarships and programmes for early promise to automatically qualify.
- review the Innovator visa to make it easier for those with the skills and experience to found an innovative business to obtain a visa
- launch the new Global Business Mobility visa by Spring 2022 for overseas businesses to establish a presence or transfer staff to the UK
- provide practical support to small firms that are using the visa system for the first time
- modernise the immigration sponsorship system to make it easier to use.
- establish a global outreach strategy by expanding the Global Entrepreneur Programme, marketing the UK’s visa offering and building an overseas talent network
High quality traineeships for young people
The government will provide an additional £126 million in England for high quality work placements and training for 16-24 year olds in the 2021/22 academic year. Employers who provide trainees with work experience will continue to be funded at a rate of £1,000 per trainee.
Payments for employers who hire new apprentices
The government will also extend and increase the payments made to employers in England who hire new apprentices. Employers who hire a new apprentice between 1 April 2021 and 30 September 2021 will receive £3,000 per new hire, compared with £1,500 per new apprentice hire (or £2,000 for those aged 24 and under) under the previous scheme. This is in addition to the existing £1,000 payment the government provides for all new 16-18 year-old apprentices and those aged under 25 with an Education, Health and Care Plan, where that applies.
Supporting apprenticeships across different employer
The government will introduce a £7 million fund from July 2021 to help employers in England set up and expand portable apprenticeships. This will enable people who need to work across multiple projects with different employers to benefit from the training that an apprenticeship provides, while helping employers benefit from access to a diverse apprenticeship talent pipeline.
Employers will be invited to bring forward proposals here, and in particular the Creative Industries Council (CIC) will be asked to do so in recognition of the potential benefits of this new approach for the creative sector. Ukie is already in conversation with the CIC through its Education and Skills working groups to ensure the interests of games companies are represented.
Extension of job schemes
In addition to this, it may come as no surprise that the furlough scheme and the Self Employment Income Support scheme have both been extended to September 2021.
Rise in corporation tax
The rate of corporation tax will increase to 25% in 2023. However, businesses with profits of £50,000 or less will continue to be taxed at 19%. In addition, the Diverted Profits Tax will rise to 31% from April 2023.
In addition to the measures announced in the budget, the Government also published the Build Back Better report setting out its plans for growth.
While the industry has not received any additional specific support in the latest Budget through an expanded UK Games Fund or additional screen sector reliefs, it does provide some useful benefits for games companies.
Visa reforms will likely help industry hire the best and brightest; reforms to apprenticeships could help develop the talent pipeline in the UK; the newly announced business support schemes look potentially helpful to games businesses, though clarity is required on whether we will qualify for them.
Questions remain over increases to corporation tax in 2023 and potential impact on games businesses. But with the road to recovery long, and the overall economic situation still uncertain, the Budget looks like it could prove useful for games companies in the short to mid term.