Video Games Tax Relief

From the 1st April 2014 Creative Industry Tax Relief was extended into the Video Games industry having already been successfully introduced in Film, TV and Animation. It is estimated that the relief will be worth an extra £188m in inward investment between now and 2019.

Video Games Tax Relief (GTR) will apply to UK registered companies and operate in a similar manner to existing UK Film Tax Relief. At Nyman Libson Paul we have successfully completed many film and TV tax credit claims, and recently the first ever successfully concluded Animation tax credit claim, through our industry expert Dave Morrison.

For a company to claim GTR they must be responsible for the designing, producing and testing the video game, OR directly negotiating, contracting and paying for rights, goods and services in relation to the video game.

For a game to qualify it must have been intended to be supplied to the public when development commenced i.e. , a project cannot be ‘switched’ into becoming a game just to claim GTR. It should also be noted games for advertising or gambling purposes are also ineligible for GTR.

All ‘core expenditure’ is eligible for GTR, with at least 25% of this having to be expenditure in the UK.

As with Film Tax Credit, GTR projects must satisfy a cultural test to qualify for relief which is certificated by the BFI.

In total UK video game businesses can now claim back 25% of 80% of their total eligible game production costs, the same as Film. This will be paid back as a tax credit to the games company following a successful claim to HMRC. NLP is in an unenviable position to assist companies throughout this process.

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