Video game developers can claim a deduction on their taxable profits if they meet the specific Video Games Tax Relief (VGTR)criteria.
Claiming a relief from HMRC
Video Games Tax Relief (VGTR) was first introduced in 2013. Video game developers must pass a cultural test, managed by the British Film Institute (BFI), to be eligible for claiming the relief – with the intention of supplying the game to the public for sale.
WR Partners has extensive experience in claiming back valuable tax relief for the creative sector.
Who qualifies for VGTR?
In contrast to Film Production Tax Relief (FPTR) and Television Production Tax Relief (TPTR), at least 25% of core expenditure must be incurred on goods or services provided from within the UK/EU. For Video Games Tax Relief (VGTR), ‘core expenditure’ includes expenditure incurred on designing, producing, and testing the game. VGTR cannot be claimed on games that are produced for advertising or promotional purposes or the purposes of gambling.
What is the benefit of VGTR?
As with Film Production Tax Relief (FPTR) and Television Production Tax Relief (TPTR), an additional Video Games Tax Relief (VGTR) deduction can be claimed to reduce taxable profits or increase a loss. If a loss is generated following the claim, some or all of this loss can be surrendered for a payable tax credit of 25%. The deduction will be the lower of 80% of total expenditure or the amount of core expenditure incurred in the UK or EU.
FAQs
Where can I get tax advice?
Our tax consultancy team at WR Partners is able to provide tax advice on a wide range of taxes.
What is tax advice?
Tax advice can cover income tax or corporation tax advice on your business profits as well as VAT on business transactions. It can include capital gains tax or stamp duty land tax advice on disposing of a property as well as inheritance tax when you pass assets on to others.
Is tax advice confidential?
Absolutely – we never share tax advice provided to our clients with third parties unless the client specifically requests that we do so.
Can I claim financial advice as a tax deduction?
That will depend on the nature of the advice – there is no hard and fast rule, unfortunately.
How do I work out VAT?
Broadly speaking, VAT is 20% of your taxable supplies. In your VAT return, you can deduct 20% of the associated input VAT and the result is the amount owed to or from HMRC.
What are the types of property tax in the UK?
There are many different types of taxes on property. There are corporate taxes if the property is held by a company, such as corporation tax and the annual tax on enveloped dwellings. There are individual taxes such as income tax on rental profits and capital gains tax if a property is disposed of. There are also transaction taxes (SDLT, LTT or LBTT depending on where the property is in the UK).
Is there a difference between English and Welsh tax systems?
For income tax, the Welsh Government is able to vary the income tax rate to a point. To date, they have chosen to keep the same rate as for taxpayers in England. This means that Welsh taxpayers should identify which country they are paying tax in, in order to pay to the right authority. This can be done through your PAYE code but also it is declared in your self-assessment tax return. There are also differences between the English Stamp Duty Land Tax and the Welsh Land Transaction tax.
How do I reduce my tax?
There are a variety of ways to mitigate a tax charge. Depending on your circumstances this might be by claiming a particular relief or expense against your taxable income or reducing the tax you pay because some types of income or gains attract lower tax rates.
Get in Touch
We love meeting new, exciting businesses. Get in touch with our team to see how we could enhance and protect your financial position.
Or if you’d prefer to speak to someone directly just give us a call on: 08000 664 664 or email: hello@wrpartners.co.uk.
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