Video Game Makers Get Tax Relief
There is a group of five Corporation Tax reliefs for creative industries including new tax relief schemes for the animation, high-end television and video games industries.
The Television tax relief (which includes animation) is available for expenditure from 1 April 2013.
Video games companies across the UK have been able to claim tax relief on their production costs, since the government’s cultural regulations come into force on 19 August 2014.
The new reliefs are modelled on the existing film tax relief which has been in place for film production companies since 2006. The aim is to encourage additional investment into culturally British film and video game production in the UK.
To qualify for the tax relief companies must be producing games that are certified as culturally British. The British Film Institute is charged with providing the certification.
The main features of the reliefs
The reliefs apply to limited companies (not LLPs/general partnerships) directly involved in developing, producing and delivering content.
The benefits are as an additional tax deduction calculated on qualifying core expenditure.
For television tax relief this can include:
- principal photography
- post production
For video games tax relief core expenditure includes designing, producing and testing the video game, it does not include the initial concept and debugging.
Similar to the SME R&D Tax Credits scheme – if the eligible production expenditure together with the additional relief creates a trading loss, it should be possible to surrender all or part of the loss for a tax credit payable to the company in cash.
Other qualifying criteria include:
- There must be an animation/high end TV programme or video game being produced
- It must be intended for broadcast/commercial release
- The content must be certified as culturally British, and A minimum of 25% of the core expenditure must be UK expenditure.
Are you ready to find out if you qualify or how much your R&D claims could be worth?