Video Games Tax Relief (VGTR) allows UK game developers to claim back 20% of their production costs. To be eligible for Video Games Tax Relief, the game must pass the BFI cultural test and your company must be responsible for the majority of the planning, designing, developing and testing of the game.
To qualify for video game tax relief you must:
Be registered for Corporation Tax.
Meet the criteria and have a certificate from the British Film Institure (BFI)
Be doing most of the planning, creating and testing of the game.
Be the only company that's making a VGTR claim for that particular game.
Have spent at least 25% of your core costs inside the EEA. VGTR doesn't count for concept design expenses or debugging once the game's finished.
Games for consoles, PC and mobile devices are all covered - but there are some restrictions, such as games designed only for advertising or gambling.
The UK video gaming industry is one of the most energetic fields to work in right now, and the government's Video Game Tax Relief scheme is taking it to a whole new level. Video Game Tax Relief aims to help make games developers more competitive, and it's great news if you qualify. It's a new incentive and reward scheme, and our great relationship with HMRC means we can help you get the jump on it right away. If your game fits the bill, you could be looking at:
Lower game development costs.
Reduced Corporation Tax.
Tax credits if you're making a loss.
In essence we will be aiming to get you up to 25% of the development costs back as a benefit.
The rules for VGTR are pretty complex, and seem to be making a lot of people's heads spin, although our handy VGTR PDF Overview is always available for download should you need it.
VGTR doesn't count for concept design expenses or debugging once the game's finished. You also can't include things like financing, marketing or advertising costs. Again, the rules can get pretty complicated, but that is why we are the specialists and we can help you through the entire process. One of the stranger aspects of VGTR is the need to pass the BFI "cultural test" to see if your game is suitable for the scheme. Things get pretty thorny here, but the basics are that you'll need to score at least 16 out of a possible 31 points based on things like:
The game's setting and characters.
How it represents British culture.
Where the game's development team and other staff are from.
One crucial thing to remember is that you can't claim VGTR and R&D Tax Relief against the same costs. That said, in some cases it's worth considering which of the two schemes would allow you to reclaim more. That's where RIFT R&D's expertise really kicks in.
The VGTR Claims Process
There are a few hoops to jump through on your way to claiming your Video Game Tax Relief, with some information to pull together and some preparations to make. We'll do all the heavy lifting, , so you can get back to actually working on your games.
First we'll determine which of the following two categories you fall into:
• Already been granted or in the process of receiving either interim or full BFI certification.
• Yet to apply for certification.
Process steps :
Qualifying conversation - A 30 minute conversation via Skype or phone to discuss the information provided, outline the process and agree costs. If you're happy with all that we'll ask you to sign an engagement letter and discuss timeframes.
BFI Certification - If you have not yet applied for your certificate, we can advise on this and take you through the process.
Information gathering - We will help you gather the necessary info and speak with your accountant.
Visit - We want to come and meet you and see the development so far. Knowing our client and understanding their project helps us write the report accurately.
Submission preparation - Now we do all of the taxing part of preparing everything and working with your accountant to send it to HMRC.
HMRC Follow-up - We'll work with your accountant to deal with any questions which may arise from HMRC on the submission. This should mean that you get your money as fast as possible.
Fees - We'll issue our invoice once the claim has been submitted, based on the predicted rebate for the client.
Ongoing consultancy - After the claim has been paid we then switch across to an advisory role where we can support you in making any subsequent claims and with any other projects you might have.
You can start to send invoices and figures to us throughout the year to start building your next claim in advance, making things as easy as possible.
On average we look at a timeframe of 4-5 weeks from enquiry to submission, however this depends on how quickly you can get us the necessary information.
Your year-end date also plays a significant part. If it's fast approaching, we might need to speed things up.
Helping you get the most from VGTR is exactly the kind of work RIFT R&D loves - and we're experts at it. We're the missing piece from the R&D puzzle you're solving, so phone on 01233 653008 or contact us now to get things moving.