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D7.1203 Video games expenditure credits (VGEC)—overview and qualifying production companies

From 1 January 2024 tax relief for video games is given through the video games expenditure credit (VGEC). Prior to 1 January 2024 relief was provided through an additional corporation tax deduction or a tax credit (see D7.1250 onwards). The transition to the revised tax relief rules post 1 January 2024 is voluntary but will be obligatory for new productions from 1 April 2025 and for all productions from 1 April 2027, at which point the previous tax reliefs will cease. Where a company elects into the VGEC and the accounting period straddles 1 January 2024, expenditure is apportioned.

Qualifying video development companies can claim taxable expenditure credit under video games expenditure credit (VGEC). The credit can be used to set off against the company's tax liability as described in D7.1203D. The requirements for a video game development company to qualify for relief are set out below. What constitutes a qualifying video game is detailed in D7.1203A. How to calculate the profit or