Video Games Tax Relief
What is Video Games Tax Relief (VGTR)?
Video games tax relief (VGTR) was introduced in April 2014 as part of the Government-backed creative industry tax relief.
To show HMRC your company is eligible to claim VGTR, your company must hold an interim or final certificate for the game you’re claiming for. These certificates are issued by the British Film Institute (BFI).
To obtain certification from the BFI, your company must pass a cultural test, certifying that the production is a British video game. And you can claim VGTR up to two years after a qualifying accounting period.
Does your video game qualify for tax relief?
Your company qualifies for and can claim creative industry tax reliefs if it is:
- liable to corporation tax
- directly involved in the production and development of video games eligibility
Your company will be entitled to claim VGTR if the video game is British and:
- the video game is intended for supply rather than as a marketing tool, for example.
- at least 25% of core expenditure is incurred on
- goods or services provided within the European Economic Area (EEA).
If your company qualifies to claim VGTR, your company is also entitled to:
- an additional deduction in computing its taxable profits
- where that additional deduction results in a loss, to surrender losses for a payable tax credit.
The games that are eligible for video games tax relief include:
- video console games
- games for PCs
- games for mobile devices, such as smartphones and tablets.
The ‘cultural test’
To qualify for the relief, all video games must pass a cultural test with the British Film Institute (BFI), certifying that the production is a British video game.
You can still send an application if the game is under development, and a final certificate will be made available once completed. The BFI will then review the completed game before issuing a final certificate.
What do you need to start a video games tax relief claim?
- Confirmation of the start date and end date of the development of each video game subject to a VGTR claim.
- A copy of the interim or final certificate issued by the British Film Institute for each video game underdevelopment during the accounting period, which confirms a game is culturally British.
- Details of estimated and actual income for each video game under development, which is subject to a
- VGTR claim.
- Details of estimated and actual expenditure incurred on the development of each game.
Want to learn more?
Get in touch with our in house expert Luke Thomas to see how we can help.
Here are our featured sectors
See how we can help you...
We believe in being involved with the local business community and that is why we network extensively, host regular business seminars, write blogs and have many trusted, professional contacts