Video Games Tax Relief Update

Video Games Tax Relief (VGTR) was introduced in April 2014 with the intention of encouraging UK video game production. The generous relief can reduce a video games development company’s corporation tax liability through an enhanced deduction, or in some cases, enable video games developers to obtain a cash credit effectively worth up to 20% of qualifying development expenditure.

One of the key conditions for claiming relief is that the video game must be certified as a British video game by the British Film Institute (BFI). New statistics released in November 2016 show that the number of games receiving final certification under the video games cultural test has more than doubled this year. 167 certificates were issued between October 15 and September 2016 compared to 77 for the same period over the previous year.

Whilst not all companies that have been granted certification will go onto make a claim, this is a good indication that more video games development companies are becoming more interested in VGTR.

In July 2016 HMRC released statistics which showed that since the introduction of VGTR there have been 140 claims paid out, with £45.9m being paid out across these 140 claims.

To date, Tait Walker have assisted clients to make claims for nearly £2m in VGTR tax credits across ten games.

We can:

  • Maximise the cash benefit and value from your claims
  • Help assess your eligibility for the BFI cultural test
  • Help prepare your BFI cultural test submission
  • Identify qualifying expenditure under the VGTR scheme
  • Prepare your VGTR claim and submission
  • Discuss any unusual technical issues with HMRC/BFI prior to making the submission to reduce uncertainty

If you would like to discuss your VGTR claim, or would like to see if you would qualify under VGTR, please don’t hesitate to contact Louise Cottam or Alastair Wilson on 0191 285 0321.