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HMRC internal manual

Video Games Development Company Manual

HM Revenue & Customs
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Qualifying video games: intended for supply

S1217CA Corporation Tax Act 2009

For a video game to qualify for Video Games Tax Relief (VGTR) it must be intended for supply.

‘Supply’ means being made available for sale in a physical format such as disc, or via the internet, to the general public. The intention must be present from the time when production activities on the game begin.  It will continue to meet this condition even if, at a later date, that intention ceases.

If a video game is not originally intended for supply, a Video Games Development Company (VGDC) cannot meet this condition by changing its intention to supply the video game to the general public. Where a video game is developed with the intention of only being used for private supply (such as internal training purposes) then the video game will not qualify.

However, if a new video game is developed with the intention of supply, then that video game may qualify for VGTR. The costs associated with the precursor video game not intended for supply will not qualify.

Not only did the precursor not meet the criteria for supply, it precedes the decision to proceed with the new video game and therefore would only constitute design costs of the original concept for the new video game. The costs would therefore not be eligible.

Certification and intention for supply

The fact that a video game is certified as British does not affect whether it is intended for supply. The Department for Culture, Media and Sport will certify video games that are not so intended.

Overseas supply

A video game may qualify as ‘intended for supply’ even if the intention is to gain a significant proportion of the earnings from supply overseas, rather than in the UK - although a British video game would normally be expected to be intended for UK supply.


The legislation does not specify whose ‘intention’ this should be. But at any time there will normally be someone entitled to determine how the video game is to be exploited. This would generally be the directors of the VGDC. However, there may be cases where someone else has a prior claim.

It is not necessary for the video game to actually be supplied to retailers or made available via the internet to meet this condition. However, if it was not so supplied, the question arises of whether it was ever so intended (and if so, when the intention changed).

If there is any doubt about the intention, the following factors could count in favour of the video game being intended for supply:

  • a finance plan written on the basis that the video game will be supplied,
  • a video game of a type commonly supplied,
  • development in a format suitable for supply,
  • payment to programmers, animators, voice artists and subcontractors on terms in line with those prevailing for video games, and
  • the relevant person can demonstrate, at the end of the relevant accounting period, the intention to supply the video game to the general public.