How is the UK's Video Games Tax Relief changing next year?
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More details have emerged surrounding the UK government's plans to transform the current Video Games Tax Relief (VGTR) initiative that allows games companies to claim back some of their expenditure.
As announced earlier this year, VGTR is going to become Video Game Expenditure Credit (VGEC), a change that is expected to kick in from January 1, 2024.
Following a draft of these plans in June 2023, the details around VGEC were altered slightly in this week's Autumn Statement: an update on the UK government's budget and economic plans.
Accounting firm RSM UK and games trade body TIGA have shared their thoughts and analysis with GamesIndustry.biz, with the former observing that VGEC "now looks set to be enacted" at the start of next year as planned.
RSM also offered a summary of the timeline for the new credits process:
Below is a summary of the changes the two organisations noted following the Autumn Statement:
Elsewhere in the Statement, additional funding was announced for the BFI certification unity for 2024/25, which should help with turnaround times for cultural certificates required for VGTR/VGEC claims. The current waiting period is often over 20 weeks.
The government also announced a consultation looking into how it can further support the VFX industry. While this is primarily focused on the film and TV industry, this consultation seemingly confirmed the Audio-Visual Expenditure Credits will come into effect from January 1, 2024 as proposed - further evidence that VGEC will also begin on this date as planned.
The Video Games Expenditure Credit will be recognised "above-the-line" (i.e. before tax has been deducted, making it more
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