On Tuesday 2nd December, Game Republic held an Ask Me Anything event (AMA) on the Great Northern Games Discord with Mark Horsfield from Plus Accounting about Video Game Tax Relief and Video Game Expenditure Credit to an audience of game developers. This tax relief has been incredibly important to the games industry in the UK as it allows game developers to claim back effectively around 20% of development costs from the government – so on a £100,000 game budget, that’s £20,000 from the Corporation Tax bill, which you could then spend on marketing, cash flow or whatever you need.
As Mark explained, “VGEC and VGTR more or less work quite similar in how they operate. VGTR, which was a European Union scheme basically, only applies if you had a game in development before March 2025 and everyone will come off that scheme from March 2027. VGEC is applied on games since 2024 and will be the new scheme going forward from April next year. It’s now focusing on purely UK costs, so you can’t claim for overseas contractors – but you get a small increase in the percentage of tax back to your company.”
Tax relief for game studios
Mark highlighted that before you claim for any tax relief, you also need to apply for a BFI Cultural Test where you need 16 out of 31 points in 4 different sections. Companies can apply for an interim certification to apply for VGEC during a game’s development or a final application when the game is ready to be made available to the public.
You can submit an application to the BFI, but it’s strongly recommended that you have an accountant to help with the application to HMRC to make sure everything is signed off correctly. It’s also recommended that you only claim for game projects above £10,000 – that cover the cost of an accountant and also ensure money back for the company applying for tax relief. Games companies can also claim for R&D Tax Credit for specific technical work (that is working towards new technology/new business – ie R&D), but companies should be careful not to also claim for the same items with VGTR or VGEC.
Check out the Plus Accounting website for more info on VGTR and VGEC and how to get in contact with Mark Horsfield and the experienced team. Our next Game Republic AMA on the Great Northern Games Discord will be on Tuesday 6th January 2026 – guest to be announced!
If you are developing games and would like to get involved with our network and events and visit gamerepublic.net/join-us and/or if you develop games or support game development in The North you can attend these free events, attend GaMaYo and other game network events by joining The Great Northern Games Discord.
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