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  • Video games developers given £35 million tax break

    1 September 2014

    A new tax relief is now available to companies producing video games enabling them to offset production costs.

    With effect from August 19, 2014, it is available to companies producing games that are certified as ‘culturally British’.

    This ‘cultural test’ means that the tax relief supports the production of culturally British games. A game must achieve a level of points based on its:

    • cultural content;
    • cultural contribution;
    • location of the game’s development and nationalities of key personnel working on the project.

    Formal certificates will be issued in respect of games that pass the test above. Such certificates will be issued by the The British Film Institute (BFI).

    Companies making these games may start claiming the tax relief against qualifying expenditure incurred since April 1.

    Video games tax relief is based on the same model as the film tax relief. Like the high-end TV and animation tax reliefs, development companies are eligible for a payable tax credit worth 25 per cent of qualifying costs.

    The BFI has already received a number of applications that pass the cultural test and has started to issue the first certificates to developers.

    Further details can be found at: https://www.gov.uk/government/news/video-games-companies-to-begin-claiming-tax-relief

    Blog posted by Andy Wood, Director of Enterprise Tax Centre