Video Games Tax Relief

Understanding Video Games Tax Relief (VGTR)

At Plus Accounting, we’re dedicated to helping video game studios in Brighton and across the UK maximise their potential through tax incentives. With the introduction of the new Video Games Expenditure Credit (VGEC) starting from 1st January 2024, we’re here to guide you through the updated landscape of tax relief opportunities.

Introducing the New Video Games Expenditure Credit (VGEC)

The VGEC is designed to support studios by offering a significant expenditure credit rate of 34% on qualifying expenditures. This incentive will be treated as gross taxable income and will appear as other income on your financial statements. Importantly, VGEC runs concurrently with the existing Video Games Tax Relief (VGTR), allowing claimants the flexibility to choose the most beneficial incentive for their project.

Since April 2014, VGTR has been a cornerstone of the government-backed creative industry tax incentives. To be eligible, your company must:

• Be liable to corporation tax.
• Be directly involved in the production and development of video games.
• Obtain either an interim or a final certificate from the British Film Institute (BFI), confirming that your game meets the cultural criteria of being a British video game.

Qualification Criteria:

• The game is intended for supply (not merely as a marketing tool).
• At least 25% of the core expenditure is incurred on goods or services within the European Economic Area (EEA).

Benefits of VGTR:

• An additional deduction in computing taxable profits.
• Option to surrender losses for a payable tax credit, should the additional deduction result in a loss.

Does Your Video Game Qualify for Tax Relief?

To qualify for VGTR, all video games must pass a cultural test administered by the BFI, certifying the production as a British video game. Applications can be submitted during development, with a final certificate issued upon completion.

Starting Your VGTR Claim:

• Dates: Confirmation of the start and end dates of game development.
• Certification: A copy of the BFI’s interim or final certificate for each game.
• Financials: Detailed records of estimated and actual income and expenditures for each game under development.

Download Our Comprehensive Guide

For a deeper dive into how VGTR and VGEC can benefit your studio, download our Indie Dev Guide titled Video Games Tax Relief here. 

You can also view our publication Level up your finances: the ultimate guide to video games tax relief in 2024.