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HMRC internal manual

Video Games Development Company Manual

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HM Revenue & Customs
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Avoidance and disclosure: avoidance - introduction

S1217CL Corporation Tax Act 2009

The legislation of Video Games Tax Relief (VGTR) is based on the legislation already in place for Film Tax Relief (FTR). FTR was designed to ensure that it did not suffer from abuses similar to the previous tax relief regime for films.

VGTR follows this by targeting relief exclusively at Video Games Development Companies (VGDCs). This means that it is not available to those whose involvement in video game development is confined to supplying or arranging finance. This eliminates many possibilities for abuse.

Because the legislation is based on the wording of the FTR rules, it is possible to use precedents from this legislation to inform anti-avoidance for VGTR.

The use of the same wording to that used in FTR is intentional. Parliament’s use of the same terms in a subsequent Act is a clear indication of the intended meaning and a Court is likely to find any cases on the equivalent legislation in FTR persuasive.