Specialist support for Video Games Expenditure Credit (VGEC)
Developing a video game is a significant investment. Video Games Expenditure Credit (VGEC) is designed to reward UK video game production companies by providing valuable tax relief on qualifying production costs.
Replacing the previous Video Games Tax Relief scheme, VGEC offers eligible companies the opportunity to claim a taxable expenditure credit on qualifying production expenditure.
Whether you're an independent studio or an established games developer, our specialist Creative Reliefs team can help you understand the rules, prepare your claim and ensure you meet HMRC's compliance requirements.
What is Video Games Expenditure Credit?
Video Games Expenditure Credit (VGEC) is the UK Government's tax incentive for qualifying video game production companies.
It replaces Video Games Tax Relief, which closed to new productions from 1 April 2025 and will cease entirely from 1 April 2027.
The relief is designed to encourage investment in UK video game production by providing a taxable expenditure credit on qualifying production costs.
Subject to HMRC's redemption rules, the credit can reduce your Corporation Tax liability and, where applicable, result in a cash payment from HMRC.
Does your game qualify?
To qualify for Video Games Expenditure Credit, your production must generally:
- Be certified by the British Film Institute (BFI) as a British video game
- Be intended for supply to the general public
- Incur at least 10% of its core expenditure on goods or services used or consumed within the UK
- Not be produced primarily for advertising, promotional or gambling purposes
The claim must be made by the production company, meaning the company responsible for designing, producing and testing the game.
Although some activities can be subcontracted, the production company must retain overall responsibility and remain actively involved throughout the project.
What costs qualify?
VGEC applies to core production expenditure, including costs incurred during:
- Game design (pre-production)
- Software development
- Programming
- Art and animation
- Audio production
- Production management
- Quality assurance and testing
- Certain qualifying subcontractor costs
- Relevant staffing costs
Early-stage concept development undertaken to assess commercial viability is not eligible, so it's important to separate these costs from qualifying production expenditure.
Our specialists help businesses identify eligible expenditure and prepare robust supporting calculations.
How much could your company claim?
Video Games Expenditure Credit is calculated at 34% of qualifying expenditure.
Qualifying expenditure is generally the lower of:
- Eligible UK core expenditure, or
- 80% of worldwide qualifying core expenditure.
As VGEC is a taxable credit, the amount ultimately received will depend on your company's tax position and the statutory redemption process.
Calculating the correct figure often requires detailed analysis of production costs across multiple accounting periods, making specialist advice particularly valuable.
British Cultural Certification
To qualify for VGEC, your game must obtain certification as a British video game through the British Film Institute (BFI).
Applications are assessed using the British Cultural Test, covering:
- Cultural content
- Cultural contribution
- Cultural hubs
- Personnel
Games must achieve at least 16 points from a possible 31.
Interim certificates are available during development, with final certification required once production has completed.
Our team can assist with:
- Cultural Test assessments
- Interim certification applications
- Final certification applications
- Supporting evidence
- Independent accountant reports where required
Preparing a compliant VGEC claim
A successful VGEC claim requires considerably more than completing a tax return.
Supporting documentation typically includes:
- Additional Information Form (AIF)
- Corporation Tax Return (CT600)
- Detailed expenditure calculations
- Project cost breakdowns
- Connected party disclosures
- British Cultural Certificate
- Supporting computations
Claims must be submitted within HMRC's statutory deadlines and supported by clear evidence demonstrating how qualifying expenditure has been calculated.
Our Video Games Expenditure Credit service
Our specialists work alongside game developers throughout the production lifecycle.
Eligibility review
We'll assess whether your company and production satisfy the VGEC requirements before a claim is submitted.
Production cost analysis
We identify qualifying expenditure and separate eligible costs from excluded expenditure.
Cultural certification support
We assist with BFI applications and help prepare the documentation required to support certification.
Technical claim preparation
Our specialists prepare detailed calculations and supporting reports that satisfy HMRC's requirements.
Corporation Tax support
We work with your finance team or existing accountant to ensure the claim is correctly reflected within your Corporation Tax computations.
HMRC enquiry support
If HMRC opens an enquiry into your claim, we'll provide technical support, evidence and correspondence throughout the process.
Why choose Lumina?
Creative Relief specialists
Creative industry tax reliefs require specialist technical knowledge. Our dedicated team understands both the legislation and the commercial realities of video game production.
Practical commercial advice
We work with independent studios, growing developers and established production companies across the creative sector.
Robust claims
Every claim is prepared with detailed supporting evidence and a strong focus on compliance.
Collaborative approach
Whether we work directly with your finance team or alongside your existing accountant, our aim is to make the claims process as straightforward as possible.
Led by specialist expertise
Lumina's Creative Reliefs service is led by Lisa Waller, an ACCA-qualified accountant and CTA-qualified tax adviser with more than 20 years' experience in Corporate Tax and over a decade specialising in Creative Reliefs, R&D Tax Relief and Patent Box.
Could your game qualify?
If you're investing in the development of video games in the UK, there's a good chance your company could benefit from Video Games Expenditure Credit.
Understanding the rules early in your production can make preparing your claim significantly easier and help avoid unnecessary delays once your project reaches completion.
Speak to Lumina's Creative Reliefs specialists to discuss your production and find out whether VGEC is available to your business.
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