Video Games Tax Relief
Companies who make video games may qualify for tax relief under the government’s Creative Industry tax reliefs – a group of 8 Corporation Tax reliefs that allow qualifying companies to increase their amount of allowable expenditure. This can reduce the amount of Corporation Tax the company needs to pay, or in the case of a loss, may allow them to convert some or all of this loss into a payable tax credit.
Your company can claim Video Games Tax Relief if:
- the video game is intended for supply to the general public
- at least 25% of core expenditure is on goods or services provided from within the European Economic Area (EEA)
You cannot claim if the video game is for:
- advertising or promotional purposes
- the purposes of gambling
In order to claim, your company mut be actively engaged in planning & decision making, including directly negotiating, contracting, and paying for rights, goods and services. Your video game must also pass a ‘cultural test’ to be certified as British by the British Film Institute (BFI).
If you qualify, you can claim 80% of core expenditure, or the total amount of EEA core expenditure, against your Corporation Tax, whichever is the lower amount. Core expenditure is expenditure on designing, producing, and testing the game. If you make a loss, some or all of this loss can be surrendered for a payable tax credit at a rate of 25%.
You can make your claim on your company tax return and may make, amend or withdraw a claim up to one year after the company’s filing date.