Video Games Expenditure Credit (VGEC)
The Video Games Expenditure Credit (VGEC) has replaced Video Games Tax Relief (VGTR) as the UK’s tax incentive for video game development.
Part of the reform of the UK’s Creative Industry Tax Reliefs, it offers a simpler, more generous way to support games made in the UK, making the country an even more attractive place to develop games.
Moving from VGTR? VGEC is the only relief for games that started production on or after 1 April 2025. Games that started earlier can stay in VGTR, but VGTR closes on 31 March 2027. Any game still in development then must move to VGEC.
✔ The British Film Institute assesses whether the game contributes to British culture or reflects British creativity, characters, setting or heritage.
✔ Games made solely for advertising, promotional or gambling purposes are not eligible.
✔ be responsible for designing, producing and testing the video game
✔ be actively engaged in planning and decision-making
✔ directly negotiate, contract and pay for rights, goods and services
✔ spend at least 10% of its core costs on goods or services used or consumed in the UK.
✔ A 34% expenditure credit on qualifying expenditure – worth around 25.5% after tax.
✔ Paid in cash if your company is loss-making.
✔ Qualifying expenditure is the lower of 80% of total core costs or your UK core costs.
✔ VGEC is available for expenditure incurred from 1 January 2024.
✔ Qualifying costs are those directly related to designing, producing and testing the game, such as software development, art and design, music and sound production, and narrative development.
✔ Costs related to marketing, distribution and post-release maintenance do not qualify.
The application process
→ Apply to the BFI for certification that your game meets the cultural test (an interim certificate can be issued during development, with a final certificate on completion).
→ Claim VGEC through your Corporation Tax return.
VGEC and R&D tax relief
⚠️ VGEC and R&D tax relief
You can claim VGEC and R&D tax relief in the same company, but not on the same costs. Expenditure that qualifies for R&D relief is excluded from VGEC, so the two claims need to be planned together.
ABGi will support you in:
Securing your British cultural certificate from the BFI
Identifying core costs and splitting them between UK and non-UK costs
Breaking those costs down into the right categories
Deciding which costs to claim under VGEC and which under R&D tax relief
Preparing and submitting your claim.
Get in touch to find out how much your game could claim.
