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Video Game Tax Relief Service

Video Game Tax Relief Service

The Video Game industry has quickly become one of the most important and valuable industries in the UK, and it is currently the largest across Europe. Gaming has garnered a reputation as both a popular pastime and an important part of digital culture, and is now the most valuable entertainment industry in the UK.

The government recognises the importance of the industry, both as part of the economy and the advances in both technology and art constantly being achieved by developers every year. The Video Game Tax Relief (VGTR) is offered by HMRC to reward those within the industry.

The scheme can offer businesses and developers a significant reduction of their tax bill, up to 20% so it is not to be missed. Like any tax, it can be a complex matter and we recommend developers seek professional advice to get their claims right.

Claiming VGTR with Cutts & Co

Our team at Cutts & Co are experts in handling tax for our clients, and we understand that many businesses, particularly those in creative industries would prefer to focus their attention on their projects.

With Cutts & Co, you’ll find an experienced team who can swap the jargon and complex calculations for simple, effective advice.

We’ll help you understand the finer details of the scheme, what you may be entitled to and support you in completing and submitting your claim. You can let our professional accountants handle your claim on your behalf, and ensure you are maximising the value of your claim.

Book a consultation to get your claim started today, or you can learn more about VGTR below.

Cutts & Co are a modern accountancy firm, and we employ a winning combination of innovative and proven practises with a team of helpful and dedicated experts. If you want an accountant that can help with your accounting queries or make your business goals a reality, we are the accountancy for you.

How to qualify for Video Game Tax Relief (VGTR)?

For your company and video game to be considered eligible, there are some criteria you’ll be required to meet.

  1. Your business must be directly involved with the planning, designing, production and testing of the game in order to be considered a video game development company (VGDC).
  2. The video game must be intended for general release to the public.
  3. The video game must not be produced for promotional or gambling* purposes.
  4. At least 25% of the costs** must be spent within the European Economic Area (EEA).
  5. The game must be certified as ‘British’ based on the BFI’s cultural test:
    1. Are the locations, stories and characters relevant to the UK and EEA?
    2. Does the video game communicate, develop and enhance British culture?
    3. How much core expenditure** was within the UK?
    4. UK/EEA worker contributions during production.
  6. The game can be produced for any platform (PC, mobile, tablet and console).

 

You can read more about eligibility from HMRC here.

* Subject to the Gambling Act 2005

** Core expenditure is defined as costs accrued during production phases

How much is VTGR worth?

For qualifying video games, VGTR is an additional tax deduction worth 20% of the total production costs of the video game. Developers will be able to claim against the lower sum of either:

  • 80% of total core expenditure
  • Total core expenditure accrued within the EEA

If the video game is profitable, developers will be able to deduct the relief amount from their corporate tax bill. However, for loss making games, developers will be able to claim 25% as a tax credit payout from HMRC.

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