Video Games Tax Relief (VGTR), the latest tax break targeted at the creative sector, is now available (since 1 April 2014).

Your video games company will be entitled to claim VGTR as long as:

  • the video game is British (there is a test managed by the BFI)
  • the video game is intended to be supplied to the general public (and not for advertising, promotional or gambling)
  • at least 25% of core expenditure is incurred on goods or services that are provided from within in the European Economic Area (EEA)

The relief allows you to make an additional deduction when calculating your taxable profits, which will reduce your corporation tax bill.

And if your company is losing money, which is often the case during the development phase, you may be entitled to a cash payment (technically, you surrender your losses for a payable tax credit).

But if you are planning to claim R&D tax credits, you need to check which makes sense. You can’t claim both VGTR and R&D tax credits for the same project.

HMRC has produced a triptych of flow-charts (who needs Francis Bacon?).

They consider:

  • Is the company a Video Games Development Company (VGDC)?
  • Is there a video game for the purposes of Video Games Tax Relief (VGTR)?
  • Does expenditure qualify for Video Games Tax Relief (VGTR)?

Artisan Accounts can help you claim VGTR (and other reliefs).

Call us now to find out more

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