Overview of video games tax relief

This is a historic guidance note on video games tax relief (VGTR), the predecessor to video games expenditure credit (VGEC), see the Video game expenditure credit (VGEC) ― key provisions guidance note. VGTR remains relevant for qualifying productions that started the production phase on or before 31 March 2025. The VGTR detailed below closes for all productions from 1 April 2027. VGEC also changes the requirement on European expenditure below to a UK expenditure requirement with a lower threshold of 10%.

Companies which carry out the development of video games may obtain an additional deduction for corporation tax purposes. The deduction is based on the company’s qualifying UK or EEA core expenditure (referred to as ‘European expenditure’ in the legislation), up to a maximum of 80% of these costs. If the deduction results in or increases a loss, a payable tax credit is available, which is equal to 25% of the losses surrendered.

To qualify for this relief, a video game development company (VGDC) must undertake