Video Games Tax Relief (VGTR)

Company Eligibility

 

To be qualifying, both the company and the video game will need to meet some conditions.

 

The company must be a Video Game Development Company (VGDC). To qualify as a VGDC the company must:

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• be liable to UK corporation tax;

• be responsible for designing, producing and testing the video game;

• be actively engaged in planning and decision-making during the design, production and testing of the video game, and

• directly negotiate contracts and pay for rights, goods and services in relation to the video game.

 

The company does need to have direct responsibility for all aspect of development with it commonplace to subcontract certain elements of development.

 

 

Video Game Eligibility

 

To qualify, the video game must:

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• be intended for supply to the general public;

• be ‘British’; and

• at least 25% of the core expenditure must be European expenditure.

 

 

Cultural Test

 

The video game must be classed as ‘British’ by the British Film Institute (BFI). The BFI has a Cultural Test which is points-based based on content, cultural contributions, location and the cast and crew. To be qualifying, the programme needs to achieve at least 16 from a possible 31 points.

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The cultural test comprises four sections:

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1. cultural content (up to 16 points)

2. cultural contribution (up to 4 points)

3. cultural hubs (up to 3 points)

4. cultural practitioners (up to 8 points)

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Additional guidance is available from the BFI by following this link

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Qualifying Expenditure

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The all-important spend that can be enhanced is core expenditure as:

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• designing;

• producing; and

• testing the video game.

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Core expenditure does not include costs relating to original concept design, debugging or post release maintenance.

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