The Video Games Expenditure Credit (VGEC) provides a 34% expenditure credit rate for video games (with a 5% uplift for animation, visual effects costs, and children’s TV to a credit rate of 39%). The expenditure credit will be treated as gross taxable income and appear as other income in the financial statements. You can claim from 1 January 2024, and as it runs in parallel with Video Games Tax Relief, the claimant has a choice of what incentive to apply for.
New video games must claim under the new expenditure credits from 1 April 2025, and all video games must claim under the expenditure credits from 1 April 2027 when the current Video games tax relief ends.
You will still be required to report each game as a separate trade for tax reporting purposes, and an online Additional Information Form (AIF) will become compulsory for all claims made on or after 1 April 2024. In addition to standard company and tax agent details, you must provide your VAT registration number and PAYE reference number. You must give critical information about the production or projects. This includes start dates, phase dates, total expenditure, and core expenditure. You must also include a digital version of each game's British Film Institute (BFI) certificate.