What qualifies as a Video Game for Video Games Tax Relief (VGTR)?

For Video Games Tax Relief, the term ‘video game’ is not itself defined within the Video Games Tax Relief legislation. It is therefore given its common meaning.

A video game is an electronic game that is played through a video device. The video device and equipment required to play the game are separate from the game itself, even if the two are sold as a single product. The video game is the software and other electronically stored content and information, rather than the hardware it is played on.

Who can claim Video Games Tax Relief?

Your company can claim VGTR if:

  • the video game is:
    • certified as British by the British Film Institute (BFI)
    • 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)

Core expenditure is what’s spent on designing, producing, and testing the game.

Your company must also:

  • be actively engaged in planning and decision-making
  • directly negotiate, contract, and pay for rights, goods, and services

To qualify for creative industry tax reliefs, all video games must pass a cultural test and be certified as British (A British video game is one which is certified as such by the Secretary of State for Digital, Culture, Media and Sport under the Video Games Tax Relief rules. The Secretary of State certifies video games on the advice of the British Film Institute Certification Unit).

The British Film Institute (BFI) manages certification and qualification on behalf of the Department for Digital, Culture, Media, and Sport. The BFI will issue:

  • an interim certificate for uncompleted work
  • a final certificate where production has finished

Who cannot claim Video Games Tax Relief?

Your company cannot claim VGTR if your game is produced for:

  • advertising or promotional purposes
  • the purposes of gambling

You can find out more about what you can claim by clicking here.

How TBAT can help

Similar to R&D Tax Relief, we help business check their eligibility and support in making claim for Video Game Tax relief. Please contact us to discuss how we can help.

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