Video Games Tax Relief and Expenditure Credits

If your company develops video games, you may be able to claim tax relief to reduce your Corporation Tax bill or receive a cash payment. Two schemes are available: Video Games Tax Relief (VGTR) for older projects, and Video Games Expenditure Credit (VGEC) for games that started production from 1 January 2024. Both require your game to be certified as British by the British Film Institute.

Which scheme applies to your company?

The scheme you can claim depends on when your video game started production:

Video Games Tax Relief (VGTR) is available for games that started production on or before 31 March 2025. This relief will close completely from 1 April 2027, meaning you cannot make any new claims after that date regardless of when production started.

Video Games Expenditure Credit (VGEC) applies to expenditure incurred from 1 January 2024 onwards. This is the newer scheme that replaces VGTR.

Who qualifies as the production company?

To claim either relief, your company must be the video game production company. This means you must:

• Be directly responsible for designing, producing and testing the game
• Be actively engaged in planning and decision-making during development
• Directly negotiate, contract and pay for rights, goods and services

For VGTR only, you must also spend at least 25% of your core costs (what you spend on designing, producing and testing the game) on goods or services provided from within the UK or the European Economic Area. The EEA includes EU countries plus Norway, Iceland and Liechtenstein.

For VGEC, at least 10% of the core costs must relate to activities in the UK.

Getting your game certified as British

Both reliefs require your video game to pass a cultural test and be certified as British by the British Film Institute. The British Film Institute manages this certification process on behalf of the Department for Culture, Media and Sport.

The British Film Institute will issue an interim certificate while your game is still in development, and a final certificate once production is complete. You need to provide these certificates when making your claim, and they must be in date when you submit your Company Tax Return.

Your game must also be intended for supply to the general public. You cannot claim either relief if your game is produced for advertising, promotional purposes or for gambling.

What you can claim under VGTR

Video Games Tax Relief works by giving you an additional deduction that reduces your taxable profits (or increases a loss). This additional deduction is the lower of either:

• 80% of total core costs, or
• The amount of core costs on goods or services provided from the UK and EEA

If this additional deduction creates or increases a loss, you can surrender some or all of that loss for a payable tax credit at a rate of 25%. This means you can receive a cash payment even if you have no Corporation Tax to pay.

What you can claim under VGEC

Video Games Expenditure Credit works differently. You can claim an expenditure credit at a rate of 34% of your qualifying expenditure. Your qualifying expenditure is the lower of either:

• 80% of total core costs, or
• The amount of UK core costs

The expenditure credit you receive is taxed at the main rate of Corporation Tax, then used to pay off your Corporation Tax liability. You can also use it to pay off other tax liabilities or surrender it to group companies. If you have any credit remaining after this, you will receive a payable credit for that amount.

How and when to claim

You make your claim on your Company Tax Return. If you submit your return on or after 6 April 2026, you must include the CT600P Creative Industries supplementary page.

For VGTR, you can make, amend or withdraw a claim up to one year after your company's filing date. For accounting periods beginning on or after 1 April 2024, this deadline extends to 2 years after the end of the period of account.

For VGEC, you can make, amend or withdraw a claim up to 2 years after the end of the period of account the claim relates to.

HMRC may accept late claims in some circumstances.

Evidence you need to provide

You must submit an additional information form as evidence for your claim. For each video game production, you need to provide:

• A British cultural certificate from the British Film Institute (interim certificate during production, then the final certificate once complete)
• Statements of the amount of core costs, split between UK and non-UK costs (for VGEC) or UK/EEA and non-UK/non-EEA costs (for VGTR)
• A breakdown of costs by category
• Details of connected party transactions (for VGEC claims)

Getting help with your claim

HMRC provides videos and webinars about creative industries expenditure credits and tax reliefs, which include worked examples of how the reliefs are calculated. You can also check the Creative Industries Expenditure Credit Manual or the Video Games Development Company Manual for detailed guidance.

Before making a claim, you can check online whether your production qualifies for the relief.

Sources

• Claiming Video Games Expenditure Credits for Corporation Tax
• Claiming Video Games Tax Relief for Corporation Tax

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.