Video Games Developers... 1UP Your Tax Relief!
Video Games Tax Relief (VGTR) has been around since 2014 but is still a hugely underclaimed relief and one that the vast majority of video game development companies are able to utilise.
In order for a video game to qualify for the relief, it has to meet three main criteria. It has to be intended to be released to the public, have incurred at least 25% of expenditure on the game in the European Economic Area (EEA), and has to be certified as British. So, for small games developers predominantly creating games in the UK, it is only the latter point that will need to be satisfied for most games intended for commercial release.
In the eight years that VGTR has been in existence, approximately 1,600 video games have been certified as ‘British’ by the British Film Institute (BFI). Applications can be made for certification on a game-by-game basis, with points scored for cultural aspects of the game ranging from the language in which the game is produced through to the underlying material upon which the game is based.
Game that are successfully certified as British can attract additional tax relief amounting to up to 16p per £1 spent. Loss making companies can receive a payable credit of up to 20p per £1 spent. Qualifying expenditure include staff costs incurred on designing, producing and testing each game, as well as third party subcontractors who contribute to the game’s development.
If you would like more information on this lucrative tax relief, contact us at hello@yes.tax.
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