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The following rules apply to accounting periods ending before 1 January 2024. From 1 January 2024 tax relief for video games is given through the video games expenditure credit (VGEC), see D7.1203. 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.

A video games production company may claim an additional deduction in respect of qualifying expenditure¹. For these purposes, 'qualifying expenditure' refers to core expenditure² that would normally be taken into account³ in calculating the profit or loss of the trade for tax purposes⁴. Core expenditure refers to expenditure on designing, producing and testing the video game. Any expenditure incurred in designing the initial concept for the video game (eg. setting out the business case for making