Video Games Expenditure Credit: what a UK games studio can claim

Written by Peter Allen MAAT, co-founder and Finance Director of Buzz Accounting, with more than 20 years in accountancy · 11 November 2026

The Video Games Expenditure Credit (VGEC) pays a UK company 34% of a video game's qualifying development expenditure, as a credit against Corporation Tax or in cash if the company has none to pay. It replaced Video Games Tax Relief (VGTR) for new productions from 1 January 2024, and VGTR itself closes completely on 1 April 2027. A studio can claim while a game is still being built, as long as the game has been certified as British by the British Film Institute (BFI), which administers the certification on behalf of the Department for Culture, Media and Sport.

How much qualifying expenditure counts

Qualifying expenditure is the lower of two figures: 80% of the game's total core expenditure, or the amount of that core expenditure incurred in the UK. Core expenditure covers designing, producing and testing the game itself — development staff, contracted studio work, art, audio, narrative and level design. It does not cover debugging after the game is released to the public, or marketing, legal and financing costs. At least 10% of core expenditure must be UK expenditure for the game to qualify at all, so an all-overseas development team rules the claim out regardless of size.

The credit is taxed at 25%, whatever the studio pays itself

HMRC's calculation taxes the expenditure credit at the main rate of Corporation Tax, 25%, before paying it out, and it applies that 25% rate to every claimant, including a loss-making studio with no Corporation Tax bill of its own and a small studio that would otherwise pay the 19% small profits rate. The net cash benefit works out at a flat 25.5% of qualifying expenditure for every claimant on that basis. The R&D merged expenditure credit is taxed at the claiming company's own Corporation Tax rate, so a loss-making or small company there keeps more of its credit. The video games credit is taxed at 25% for every claimant. A small or loss-making studio keeps the same 25.5% share of qualifying expenditure as a large profitable one.

Worked example — illustrative figures. Silverlea Games, a six-person UK studio finishing its first title.

Total core expenditure for the year: £300,000, covering the in-house team and one contracted animator working overseas.
UK core expenditure: £270,000 (90% of the total), well over the 10% UK minimum.
80% of total core expenditure: £300,000 × 80% = £240,000.
Qualifying expenditure is the lower of the two figures: £270,000 and £240,000, so £240,000.
Expenditure credit: £240,000 × 34% = £81,600.
Notional tax at the 25% main rate: £81,600 × 25% = £20,400.
Cash received: £61,200, paid whether or not Silverlea made a profit that year.

Getting the game certified as British

The BFI runs a points-based cultural test for video games, with four sections: cultural content (up to 16 points), cultural contribution (up to 4 points), cultural hubs (up to 3 points) and cultural practitioners (up to 8 points). A game needs 16 of the available 31 points to pass. A studio can apply for an interim certificate at any point before or during development, which is what lets it claim VGEC while the game is still being made. A final certificate is needed once the game is finished and ready for the public, and that application needs a copy of the completed game and an auditor's report, on top of the same cultural test.

Filing the claim

A claim goes in with the Company Tax Return, supported by an additional information form setting out the expenditure and the certification. For returns submitted on or after 6 April 2026, the return also has to include the CT600P Creative Industries supplementary page. The claim itself has to be made within two years of the end of the period of account it relates to, the same window as an R&D claim.

Which games qualify

A game qualifies if it is certified as British under the cultural test, is intended for supply to the general public, meets the 10% UK core expenditure test, and is made by a company within the UK Corporation Tax net. Two kinds of game are excluded regardless of the score: a game made predominantly for advertising or promotional purposes, and a game made for gambling. Carrying ordinary in-game advertising, such as a free mobile version that shows ads alongside a paid version, does not fall foul of the advertising exclusion. A game that lets a player cash out a currency of real monetary value they won through skill or chance, including cryptocurrency or an NFT that can be traded outside the game, is treated as gambling even without a cash stake going in.

What to do this week

Add up this year's core expenditure and split it between UK and overseas work, to check the 10% UK test and work out which of the two qualifying-expenditure figures is lower.
If the game is not certified yet, start the BFI cultural test now. An interim certificate can be applied for while development is still under way, before the game is finished or released.
If your accounting period ends after 5 April 2026, check the Company Tax Return includes the CT600P Creative Industries page as well as the additional information form.
Look again at any in-game advertising or real-money cash-out feature against the exclusions before the certificate is applied for, since either can put the whole claim at risk.
If engine or tooling work on the game resolved a genuine technical problem beyond building the game itself, check separately whether that work also qualifies for R&D tax relief.

We prepare Company Tax Returns and the claims that go with them for a fixed fee, agreed before we start. If your studio is also doing genuine technical R&D in its engine or tools, our R&D tax relief page covers that separate route. Our guide to bookkeeping in Xero for startups covers tracking project costs as you go, which is what a VGEC claim is built from a year later. Your monthly accounting fee comes from the instant quote. Get started.

Common questions

What is the Video Games Expenditure Credit?

It is a UK Corporation Tax credit worth 34% of a video game's qualifying development expenditure, available to a UK company making a game that the British Film Institute has certified as British. It replaced Video Games Tax Relief for new productions from 1 January 2024, and the older relief closes completely on 1 April 2027. The credit is paid out as cash to a loss-making studio and set against the Corporation Tax bill of a profitable one, and a studio can claim it while the game is still in development rather than waiting until release.

How much is the credit actually worth after tax?

After tax, the credit is worth 25.5% of qualifying expenditure, because HMRC taxes the credit itself at the 25% main rate of Corporation Tax regardless of the claiming studio's own rate. Qualifying expenditure is the lower of 80% of the game's total core expenditure or the amount of that core expenditure incurred in the UK, so on £240,000 of qualifying expenditure the credit is £81,600, and the cash received after the notional 25% tax charge is £61,200. The same flat 25.5% applies whether the studio is loss-making, on the small profits rate, or paying the main rate itself.

Does our game need to be finished before we can claim?

No, a studio can claim while a game is still being made, using an interim certificate from the British Film Institute instead of the final one. An interim certificate can be applied for at any point before or during development, and it is what lets development costs go into a VGEC claim in the accounting periods before the game is released. A final certificate is needed once the game is complete and ready for the public, and that later application needs a copy of the finished game and an auditor's report as well as the cultural test.

What is the difference between an interim and a final certificate?

An interim certificate covers a game that is still in development, and a studio can apply for one at any point before or during that development. A final certificate covers a finished game and can only be applied for once the game is complete and ready to be made available to the general public, with a copy of the completed game and an auditor's report submitted alongside the same cultural test used for the interim application. Most studios use an interim certificate first, to claim VGEC on costs as they are incurred, and apply for the final certificate once the game ships.

Can a loss-making studio get cash from a VGEC claim?

Yes. The video games credit is paid out in cash where a studio has no Corporation Tax liability to set it against, in the same way as the R&D expenditure credit. HMRC still applies a notional tax charge at the 25% main rate of Corporation Tax before paying out, so a loss-making studio receives the same 25.5% of qualifying expenditure as a profitable one. That makes the credit a genuine source of cash for a pre-revenue studio funding development from its own costs rather than from sales.

Can we still use the old Video Games Tax Relief instead of VGEC?

Only if the game's production phase started on or before 31 March 2025, and only until 1 April 2027, when Video Games Tax Relief closes completely for every production still using it. A game that started production after that date has to claim under VGEC from the outset. A game already claiming under the old relief before 1 April 2025 can continue to use it during the transition, but every claim has to move across to VGEC once the old relief closes.

What has to be filed with a VGEC claim, and by when?

A VGEC claim is made with the Company Tax Return, supported by an additional information form that sets out the qualifying expenditure and the BFI certification. For a return submitted on or after 6 April 2026, the Company Tax Return also has to include the CT600P Creative Industries supplementary page. The claim itself has to be made within two years of the end of the period of account it relates to, the same time limit that applies to an R&D tax relief claim.

Does every kind of game qualify for VGEC?

No. A game first has to pass the BFI's cultural test, scoring at least 16 of the available 31 points across its four sections, and at least 10% of its core expenditure has to be UK expenditure. Beyond that, a game made predominantly for advertising or promotional purposes does not qualify, nor does a game made for gambling, including one that lets a player cash out a currency of real monetary value, such as cryptocurrency or a tradeable NFT, that they won through skill or chance. Carrying ordinary in-game advertising, such as a free version of a mobile game that shows ads, does not trigger the advertising exclusion on its own.