A Guide to Video Games Tax Relief

Video Games Tax Relief is part of the creative industry tax reliefs that allows a qualifying company to claim a larger deduction, or claim a payable tax credit when calculating their taxable profits.

Oury Clark has created this guide to demonstrate how businesses can benefit from this attractive tax relief. This guide only provides an overview and professional advice should be sought.

Game developer groups had been campaigning for a tax relief to be introduced as developers in many countries received tax breaks for production or other means of support to the industry. No equivalent tax breaks existed in the UK and  employment and investment in the industry was declining. The Video Games Tax Relief has been introduced in order to allow UK game developers to compete internationally on a level playing field, promote investment, job creation and support the  production of culturally British video games.

What video games qualify?

A company will be entitled to claim Video Games Tax Relief if: The qualifying criteria for a game are wide and all video games qualify, but the legislation expressly excludes video games where they are produced for advertising, promotional purposes or gambling.

A company will be entitled to claim Video Games Tax Relief if:

• European – The video game must be European; and
• Supply – The video game is intended for supply; and
• Expenditure – At least 25% of core expenditure is on goods or service that are provided from within the European Economic area (EEA).