TBAT Innovation helps businesses to claim Video Games Tax Relief for the design, production and testing of new video games.
Get in touch with our tax experts to find out how we can help with your creative relief.
Send us a messageVideo Games Tax Relief (VGTR) is a government-backed tax relief incentive created to support and grow the UK’s video game industry. Eligible UK-based video game developers, working on games in production before 1st April 2025, can claim back a significant amount of tax relief or payable credit for qualifying production expenditure.
The VGTR scheme aims to encourage growth in the creative sector by making game development more affordable, retain talent, and attract overseas studios to build and produce their games in the UK.
For many companies, the new VGEC scheme has now replaced VGTR. Games that began production on or after 1st April 2025 are only eligible to claim VGEC. Qualifying projects that started before this date may continue to claim VGTR.
The replacement scheme applies to qualifying expenditure incurred from 1st January 2024. Unlike its predecessor, VGEC operates as an above‑the‑line expenditure credit rather than a tax deduction. The headline credit rate is 34% of qualifying expenditure, which, after Corporation Tax, delivers an effective net benefit of approximately 25.5% for profitable companies, with a higher effective return available to loss‑making companies that are eligible for a payable credit.
VGEC also removes the cap on subcontractor expenditure, making the relief significantly more generous for studios that depend on external development partners.
The original scheme was launched in April 2014. Under VGTR, eligible companies could claim an enhanced deduction in their Corporation Tax return, providing effective tax relief of up to 20% on qualifying UK core expenditure. VGTR applied to accounting periods starting before 1st April 2025, and projects that began under the regime may still qualify under transitional provisions.
The scheme also placed a cap on the amount of subcontractor costs that could be included as qualifying expenditure.
Our experienced team of tax and accountancy experts can support you through every step of the process, from building your British Film Institute (BFI) Cultural Test for certification to calculating your expenditure for your Video Games Tax Relief claim.
It all starts with a quick and painless chat to understand whether you qualify and how much you could claim.
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Ian Davie
T: 01332 819740
E: info@tbat.co.uk
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