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HMRC internal manual

Video Games Development Company Manual

Claims: abandonment

S1216E-S1216EC Corporation Tax Act 2009

If development of a video game ceases before completion, the abandonment effectively takes the place of completion for the purposes of Video Games Tax Relief (VGTR).

The Video Games Development Company (VGDC) can still claim relief for qualifying development expenditure incurred before the video game was abandoned. The abandonment does not in itself affect entitlement to any VGTR given in previous periods.

As with a completed video game, this entitlement still depends on whether the video game satisfies the qualifying conditions:

  • the VGDC may present an interim certificate for the final period (since it will not be able to procure a final certificate) (VGDC40030). If the video game is still a British video game then entitlement to any VGTR already given stands, and
  • the video game must still satisfy the 25% minimum EEA core expenditure condition (VGDC40040) though now with respect to the actual, rather than planned, level of expenditure. If the bulk of the core EEA expenditure was planned to fall later in development, after the point at which the video game was abandoned this condition may not be satisfied.