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HMRC internal manual

Video Games Development Company Manual

Losses: pre-completion periods

S1217DA Corporation Tax Act 2009 (CTA 2009)

Relief limited to carry forward

The rules in Part 15B CTA 2009 restrict the normal loss relief rules prior to completion of the video game.

Where a Video Games Development Company (VGDC) has a trading loss in any period before that in which the video game is completed, any losses can only be carried forward to be relieved against profits of the same trade.

Exceptionally, where a video game trade for an uncompleted video game has made a profit in an earlier year, losses cannot be carried back to be offset against the profit. This may occur where income, such as a grant, has created a profit.

This restriction applies to all losses of the video game trade, not just those attributable to the relief element of Video Games Tax Relief and/or enhanceable expenditure.

These provisions are not altered by the new loss relief provisions brought in from 1 April 2017 for pre-completion periods.