Video Game
Tax Relief
how much you could receive
What Is Video Game Tax Relief
Everything you need to know
The Video Game Tax Relief (VGTR) also knows as Games Tax Relief was introduced in the UK to reward game developers for their innovation within the field and allows them to claim a reduction in tax liability or payable tax credits, as a way to encourage further development in the sector.
The incentive allows you to save up to 20% of your production costs that are associated with the development of your product. Those things include the design aspect of your work, the production itself and the testing stage where you have incurred costs.
How Much Video Game Tax Relief Can I Claim?
The amount that you can claim will depend on how much you have spent on the production of you video game. You can claim for your core production costs at a rate of up to 20% and you will be able to claim the incentive on whichever expenditure is lower:
- The European Economic Area (EEA) expenditure you have incurred
- 80% of your total core expenditure
There are other factors that also affect in what form you will receive your money back. This is whether you are a profitable or a loss-making company as a whole, not just that particular project. You will be able to reduce your Corporation Tax liability if your company is profit making, however, if you are a loss-making company you will be able to receive a 25% payable cash credit.
How Do I Qualify For Video Game Tax Relief?
- In order to be eligible for the relief you must pass the British Film Institute’s cultural test to prove that your work can be classed as British. You will be required to get 16 points on the test. The maximum number of points that you can currently get in the test is 31
- You must be in charge of most of the following aspects of the following: planning and the design stage, production of the game itself, and testing of the game
- You company must be involved in all of the following stages of your video game development: design, production, testing
- The game must be intended for the general public and at least 25% of your core expenditure must be spent in the European Economic Area (EEA)
Video Game Tax Relief - What You Cannot Claim
There are a few limiting factors to the incentive:
- You cannot claim this incentive if you are a sole trader or a partnership and you have been taxed under Income Tax
- You will not be eligible to claim if the production of your video game was to advertise another product or a service
COMPLEX TAX INVESTIGATIONS
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Churchill Tax provides all types of tax advice on complex issues to individuals and companies across all sectors. We make the time and effort to understand our client’s businesses and needs and our tax experts have a proactive and flexible approach to helping clients overcoming the challenges they face.
GOT A QUESTION?
If you are looking to action any of these tips in our guide or if have any other queries about tax and planning your finances for your future, our Private Client Tax team are here to help. Get in touch with a member of the team for an initial chat now.
How Much Tax Relief Can I Get?
How Does Churchill Tax Handle My Claim?
1. Getting To Know You
2. Evaluating Your Costs
We will request your financials to evaluate your costs and calculate your benefit
3. Writing Your Claim
We will write the claim for you which you can look over before submission to HMRC – you can be as involved in the process of writing your claim as you want to be.
4. Rewards
Receive your benefit in either a reduction in your Corporation Tax liability or a payable credit
WHAT WE OFFER
When appointing a Tax specialist to act on your behalf, it’s important to know that you’re in good hands. You need to know that the advisor you appoint has the experience, skills and courage required to achieve the best possible outcome for you.
Our role is as much about supporting our clients personally as it is about providing professional and effective Tax representation. This is why we have implemented facilities such as flexible payment options , that aim to make the process straight forward and stress free.
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BOOK A CONSULTATION
Churchill Tax provides all types of tax advice on complex issues to individuals and companies across all sectors. We make the time and effort to understand our client’s businesses and needs and our tax experts have a proactive and flexible approach to helping clients overcoming the challenges they face.