Video Games Tax Relief (VGTR) & VGEC

Understanding VGTR and VGEC: UK Tax Relief for the Video Games Industry

Video Games Tax Relief (VGTR) is a government-backed incentive designed to support the UK’s thriving video games industry. Available to UK-based video games development companies, VGTR enables eligible businesses to claim a significant tax relief or payable credit for qualifying production expenditure. It is part of the UK’s broader Audio-Visual Expenditure Credit (AVEC) framework, which also covers film, animation, and high-end television.

As of 1 April 2024, VGTR is transitioning to the new Video Games Expenditure Credit (VGEC), under the reformed AVEC regime. Existing VGTR claims can still be made for qualifying projects that began before the transition date. The credit now offers a 34% payable credit on 80% of qualifying UK/EEA production spend.

At FI Group, we help studios navigate this evolving landscape, assess eligibility, and optimise their VGTR and VGEC claims. With a strong UK presence and international tax expertise across 43 offices, our team ensures your claim is maximised and fully compliant with HMRC requirements.

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Who Can Claim VGTR?

To be eligible for VGTR (or VGEC), a company must:

  • Be responsible for the design, production, and testing of a video game
  • Be subject to UK Corporation Tax
  • Pass the British cultural test, administered by the British Film Institute (BFI)

Eligible companies can claim whether they are developing games for commercial release on PC, console, mobile, or VR platforms. However, games produced solely for advertising, promotion, or gambling purposes are excluded.

Documentation Requirements

Claiming VGTR or VGEC requires:

  • A valid BFI certificate (interim or final)
  • Detailed cost breakdown by activity and location
  • Project descriptions and timelines
  • Corporation Tax computations and statutory accounts

FI Group manages the entire process, from cultural certification to submission and HMRC liaison.

Key Features

VGTR & VGEC Explained: How UK Game Developers Can Claim Tax Relief

Here are some key features to claiming VGTR and VGEC tax relief options for UK gaming studios

How VGTR and the New VGEC Compare

Feature VGTR (Pre-April 2024) VGEC (Post-April 2024)
Relief Type Additional deduction + credit Expenditure credit
Credit Rate 25% payable credit 34% of 80% of core spend
Cultural Test Required Yes Yes
Cap on Subcontracted Spend £1 million £1 million

The new VGEC regime is more generous in headline terms and aligns with global norms for production credits. However, the criteria for costs and structuring of claims have evolved.

FI Group helps studios adapt to these changes, ensuring continuity of claims and strategic use of both old and new reliefs.

Any Questions?

VGTR & VGEC Explained: Answers to the Most Common Questions

Got questions about VGTR (Video Games Tax Relief) or VGEC (Video Games Expenditure Credit)? You're not alone. This FAQ covers the most common queries UK game developers have about these tax incentives, including eligibility, claims, and the transition from VGTR to VGEC.

How FI Group Supports Video Game Developers
How FI Group Supports Video Game Developers

Our tailored services for VGTR and VGEC include:

  • Cultural test support and BFI application guidance
  • Qualifying expenditure analysis
  • In-year claim planning to optimise timing
  • Full claim preparation and documentation
  • HMRC enquiry support and compliance assurance

With consultants who understand both the technical and commercial realities of game development, FI Group ensures your tax relief process is efficient, strategic, and reliable.

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