Indie Dev’ Guide 15: Video Games Expenditure Credit

In the Spring 2023 Budget the government announced plans for the introduction of Video Games Expenditure Credit (VGEC), which is set to replace the current Video Games Tax Relief (VGTR). The government are due to publish draft legislation for these reforms in Summer 2023 and these reforms will be legislated for in a future Finance Bill.

Qualifying Rules and eligibility

  • Your company qualifies if it is liable to Corporation Tax and directly involved in the production and development of video games.
  • The eligibility requirement for the VGEC will require a minimum of 10% of expenditure to be used or consumed in the UK.
  • The video game is intended for supply, rather than for a marketing tool, for example.

The ‘Cultural Test’

  • To qualify for VGTR or VGEC the video games must pass a cultural test with the BFI, certifying that the production is a British video game.

Key points

  • The new games credit will have a rate of relief of 34% on 80% of ‘qualifying expenditure’.
  • Expenditure made in the European Economic Area is no longer allowable qualifying expenditure.
  • The £1m per game cap on subcontracting costs no longer applies.


VGEC will be compulsory for games commencing development from 1 April 2025, while those who wish to do so, can adopt the new relief from January 2024. Any titles already in development prior to April 2025 can continue claim under VGTR until March 2027.


Other important information

  • All claims, whether VGTR or VGEC will need to be required to be made digitally and more information will be required.
  • The time limit for making a claim is to be changed to two years from the end of the period of account to which they relate. This is as opposed to 12 months from the statutory filing date.
  • The government will be introducing an anti-abuse measure on payments between connected parties to restrict qualifying expenditure to the costs incurred by the group.
  • The government will legislate to prevent credits being paid out to companies that are undertakings in difficulty.

Download the complete guide

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Disclaimer: This information is intended for guidance purposes only and we recommend that you take specific advice before taking any action or relying on these notes. Plus Accounting is a trading name of Feist Hedgethorne Limited. Registered to carry out Audit work in the UK and regulated for a range of investment business activities by the Institute of Chartered Accountants in England & Wales.

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