Claiming Video Games Expenditure Credits for Corporation Tax
Find out if you qualify for Video Games Expenditure Credits for Corporation Tax and what you can claim.
If you’re a company claiming tax relief you can claim Video Games Expenditure Credit (VGEC) on expenditure incurred from 1 January 2024.
Your company can claim a Video Games Expenditure Credit on a video game if:
- it is certified as British by the British Film Institute
- it is intended for supply to the general public
- at least 10% of the ‘core costs’ relate to activities in the UK — what’s spent on designing, producing and testing the game
Your company must be:
- directly responsible for designing, producing, and testing the game
- actively engaged in planning and decision-making
- directly negotiate, contract and pay for rights, goods and services
Your company cannot claim this relief if your game is produced for advertising, promotional purposes or for the purposes of gambling.
You have up to 2 years after the end of the period of account to which the claim relates, to make, amend or withdraw a claim for creative industry tax reliefs.
Before you claim
You’ll need to have British certification before you can claim. You can read about passing the cultural test and applying for British certification on the British Film Institute website.
The British Film Institute will issue:
- an interim certificate — for uncompleted work
- a final certificate — when production has finished
You’ll need to:
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Get British certification.
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Find out what you can claim.
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Check the qualifying conditions.
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Work out the core costs.
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Complete the additional information form — from 1 April 2024 all claims must include this.
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Claim on your Company Tax Return.
What you can claim
You can claim an expenditure credit at a rate of 34% of your qualifying expenditure. Qualifying expenditure will be the lower of either:
- 80% of total core costs
- the amount of UK core costs
You will need to work out the amount of expenditure credit:
- due to your company
- used to pay off your tax liabilities
- surrendered to other companies
- due as a payable credit
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Your company’s total expenditure credits for a period are taxed at the main rate of Corporation Tax.
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They are then used to pay off your Corporation Tax liability.
They can also be used to pay off other tax liabilities if you have them, or surrendered to other group companies.
If you have credit remaining after these steps, you will receive a payable credit for that amount.
Work out core costs
Core costs are what is spent on designing, producing and testing the video game
What you’ll need
For each production you must provide:
- a British cultural certificate from the British Film Institute — if the game is still in development, you can provide an interim certificate and send the final certificate when the game is complete. Certificates must be in date when you submit them
- statements of the amount of core costs, split between UK and non-UK costs
- a breakdown of costs by category
- details of connected party transactions
From 1 April 2024, all claims must be accompanied by an additional information form. This will allow you to provide the necessary evidence to support your claim.
How to claim
You must claim for relief on your Company Tax Return.
You may make, amend or withdraw a claim to creative industry tax reliefs up to two years after the end of the period of account the claim relates to.
HMRC may agree to accept late claims in some circumstances.
Further information
Detailed guidance on the Video Games Expenditure Credit will be published soon.