Video Games Tax Relief (VGTR)

Understanding the Video Games Tax Relief

Much like in other creative sectors such as film and theatre, tax relief exists in the UK games industry in order to promote works deemed to provide cultural value and support UK businesses.

Ukie’s Access to Finance Guide provides detailed guidance on VGTR. Additionally, HMRC offers guidance on taxation for games companies in its Video Games Development Company Manual.

Video Games Tax Relief is an incentive that allows games studios to claim tax relief from the Government, following the development of a game. In order to qualify for VGTR, the game must meet several criteria and pass the BFI’s Cultural Test.

Applying for the Cultural Test

You can do that via the BFI website.

Economic Impacts of the VGTR

These can be found in the Screen Business report.

Amount Paid in Tax Relief to Date

According to data released by HMRC in August 2019, a total of £324 million of VGTR has been paid out to 1,110 claims since the relief was launched in April 2014. In 2018-19, 345 claims were made for a total of £103 million, which represented 535 games.

Since the relief was introduced in 2014, 1,075 video games have made claims, accounting for £2.6 billion of UK expenditure.

Claims and amount of relief paid on receipts basis

	Paid
Year Claim Paid	Number of Games	Number of Claims	Amount (£m)
2014-15	10	10	-
2015-16	100	130	45
2016-17	340	275	71
2017-18	475	345	104
2018-19	535	345	103
Total	-	1,110	324

NB. No total provided for number of games, as a single game can be claimed in multiple years.

Claims and amount of relief paid on receipts basis, split by size of claim

	2016-17		2017-18		2018-19
Size of claim	Number	Amount (£m)	Number	Amount (£m)	Number	Amount (£m)
Up to £5,000	30	-	65	-	50	-
£5,001 to £10,000	35	-	35	-	25	-
£10,001 to £25,000	55	1	80	1	65	1
£25,001 to £50,000	35	1	40	1	55	2
£50,001 to £100,000	30	2	30	2	45	3
£100,001 to £500,000	50	11	65	13	55	12
£500,001 to £1,000,000	20	13	15	9	20	12
Over £1,000,000	15	42	25	77	30	73
Total	275	71	345	104	345	103

NB. Numbers are rounded to the nearest 5 and amounts to £1 million. Totals may not sum due to rounding.

Video Games which claimed tax relief, by expenditure and financial year of completion

Finance Year of Completion	Number of Games Claimed	UK Expenditure* (£m)	Total Expenditure (£m)
2014-15	70	23	25
2015-16	230	546	747
2016-17	250	405	454
2017-18	240	323	435
2018-19	170	492	1,121
Incomplete*	110	780	927
Total	1,075	2,569	3,709

NB. Expenditure final and interim only. Games with an estimated completion date after 31st March 2019 are defined as 'Incomplete'.

Certifications by Fiscal (Financial) Year

Latest data available via the BFI here

Final Certifications per Year

Year	Number	EEA/UK spend (£m)	Total budget (£m)	UK spend as a % of total budget
Apr 2014-Mar 2015	19	14.3	15.1	95.2%
Apr 2014-Mar 2016	133	189.0	275.3	68.7%
Apr 2014-Mar 2017	214	220.8	258.3	85.5%
Apr 2014-Mar 2018	201	247.8	262.6	94.4%
Apr 2014-Mar 2019	188	430.1	1,042.1	41.3%

Interim Certifications per Year

Year	Number	EEA/UK spend (£m)	Total budget (£m)	UK spend as a % of total budget
Apr 2014-Mar 2015	47	157.7	166.32	94.7%
Apr 2014-Mar 2016	136	575.75	631.22	91.22%
Apr 2014-Mar 2017	187	412.27	482.22	85.5%
Apr 2014-Mar 2018	181	540.43	1,107.17	48.8%
Apr 2014-Mar 2019	151	411.91	536.96	41.3%

Median budgets of interim video game cultural test certifications

Year	Median budget (£m)
2014*	0.2
2015	0.6
2016	0.4
2017	0.4
2018	0.5
2019 (Q1)	1.0

NB. As the tax relief for video games commenced in April 2014, median budget for 2014 is for Q2-Q4.

Certifications by Calendar Year

Latest data available via the BFI here

Final Certifications per Year

Year	Number	UK/EEA spend (£m)	Total budget (£m)	UK/EEA spend as a % of total budget
2015	116	180.9	265.6	68.1%
2016	189	202.2	224.5	90.1%
2017	212	248.8	277.5	89.7%
2018	195	201.9	263.9	76.5%

Interim Certifications per Year

Year	Number	UK/EEA spend (£m)	Total budget (£m)	UK/EEA spend as a % of total budget
2015	121	548.0	603.6	90.8%
2016	176	401.7	466.9	86.0%
2017	179	434.3	461.7	94.1%
2018	170	517.6	1,106.4	46.8%

Median budgets of interim video game cultural test certifications

Year	Median budget (£m)
2015	0.6
2016	0.4
2017	0.4
2018	0.5