Video games tax relief ― key provisions

Produced by Tolley

The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Video games tax relief ― key provisions
  • Overview
  • Eligible video games
  • Video games development company
  • Video game development activities
  • Eligible expenditure
  • The separate video game trade
  • Calculating the additional deduction
  • Development completed in one period
  • Development completed in more than one period
  • More...

Video games tax relief ― key provisions

This guidance note sets out the main provisions for video games tax relief (VGTR). These were introduced by Finance Act 2013 and are included in CTA 2009, ss 1217A–1217EC (Pt 15B). Following an in-depth investigation by the European Commission to determine whether the development of video games in the UK requires support in the form of tax incentives, it concluded that the relief is compatible with EU State Aid rules in March 2014. The relief came into effect from 1 April 2014. The provisions for the cultural test in relation to video games relief are set out in SI 2014/1958, which came into force on 19 August 2014.

Details of the tax relief available for television programmes and animation can be found in the Television tax reliefs ― key provisions guidance note. The European Commission has provided state aid approval for these two reliefs. HMRC is accepting claims from 1 April 2013. The reliefs are very similar although there are some differences in terminology.

Post 1 January 2021, with the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU, state aid rules have been replaced by a subsidy control system in the EU-UK Trade and Cooperation Agreement (TCA) which prohibits certain specified subsidies if the subsidies concerned have or could have a material effect on trade or investment between the EU and the UK. However there is currently no detail on the operation of the subsidy control system or how it will interact with the Northern Ireland Protocol which maintains some aspects of the EU state aid rules.


The VGTR is available for accounting periods commencing on or after 1 April 2014. The legislation sets out the provisions which deal with accounting periods straddling this date. 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

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