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HMRC internal manual

Video Games Development Company Manual

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HM Revenue & Customs
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Claims: details to be provided

Single-period developments

Video games in respect of which the Video Games Development Company (VGDC) is entitled to claim Video Games Tax Relief (VGTR) may be completed within a single accounting period.

The claim will be made after completion, and the VGDC should generally possess final information on the video game’s budget, its British status and the extent of European Economic Area (EEA) core expenditure which it must supply with its tax return submission.

The company should supply the following additional information with its tax return submission:

  • the title of the video game in respect of which relief is being claimed;
  • a final certificate from the Department for Culture, Media & Sport (DCMS), showing that the video game is British (VGDC40030);
  • the DCMS reference number, if known;
  • final statements of the amounts of:
    • total core expenditure (VGDC50010) on the video game (whether by the VGDC or other parties to its development);
    • core expenditure by the VGDC on the video game that is EEA expenditure in order to demonstrate that the minimum EEA expenditure condition has been met (VGDC40040);
       
  • the amount of additional deduction claimed (VGDC55020); and
  • the amount, if any, of loss surrendered for payable credit (VGDC55100).

This is part of the normal self-assessment process, and although the VGDC is required to keep adequate records to support its return, it is not specifically required to provide audited figures.

It will assist the processing of claims if VGDCs could also include:

  • A breakdown of the expenditure on video games development activities. The level of appropriate detail will depend on the size of the budget. If there is a budget for the specific project, then the headings adopted in the management accounts should be adequate. The Manchester Creative Industries Unit (contact details at VGDC10020) can provide further advice if needed.
  • An analysis of that expenditure into:
    • expenditure on designing the initial concept
    • other non-development expenditure
    • core expenditure: EEA
    • core expenditure: non-EEA
    • debugging and maintenance costs
    • delivery/distribution costs.
       
  • Details of any methods of apportionment and/or assumptions used in producing these figures and any other information relevant to the claim.

Multi-period developments

Where the development of the video game spans more than one accounting period the information required to support any claim is similar to that set out above. However, the final numbers may not yet be available. The company should state the planned amounts of:

  • core expenditure: EEA
  • core expenditure: Total

Final figures not available

Where the VGDC retains its rights in the video game after its completion and may be obliged to make payments related to its development in later periods it may be necessary to estimate the final amounts of total core expenditure and core expenditure that is EEA expenditure - see VGDC40040 and VGDC10020 for details of how such future obligations impact on the minimum EEA expenditure condition.