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HMRC internal manual

Video Games Development Company Manual

Calculation: surrenderable losses and Video Games Tax Credit

S1217CH, S 1217CI Corporation Tax Act 2009 (CTA 2009)

A Video Games Development Company (VGDC) has the option of claiming Video Games Tax Relief (VGTR) as a payable tax credit - a payment direct from HMRC. It can do so in any period in which it has a surrenderable loss.

The company may surrender all or part of its surrenderable loss.

The amount of the surrenderable loss

The amount of the ‘surrenderable loss’ for any accounting period is the lesser of:

  • the amount the company’s available loss for the accounting period, and
  • the enhanceable expenditure (VGDC55020) for that period.

The VGDC’s available loss is the sum of the loss for the period plus any relevant unused loss brought forward.

The relevant unused loss is any available loss for previous periods not surrendered under S1216CI(1) CTA 2009 or carried forward under S45 Corporation Tax Act 2010 and set against profits of the separate video game trade.

The amount of payable credit

The amount of the payment is the payable credit rate multiplied by the amount of loss surrendered.

The payable credit rate is 25%.