What is Video Games Tax Relief? | Dare Academy

What is Video Games Tax Relief? | Dare Academy


To make a claim, you have
to have a limited company with a qualifying
video game trade. You have to apply to the
British Film Institute, BFI for short, for
a certificate just to prove that the game
is culturally British. This is based on
location, character, and a few other factors. To apply for a certificate, this can be done
through an application on the British Film
Institute website. There’s a total of
31 points for which your game needs 16 to qualify. This covers characters,
settings, locations, and design, among other factors. Core costs of the
video game qualify. These relate to design, testing,
and production of the game. This will mainly be salary
and subcontractor costs. As an example,
we’ve had a client who remunerated
themselves via dividends, but this was not
eligible to be claimed as it is not
classed as earnings. The relief is an 80% enhanced
deduction for the core costs. For profit-making companies, this will result in a tax saving of 19% on the
enhanced deduction. For loss companies,
they can surrender the losses for 25% tax credit. We’ve found this to
be extremely useful for startup companies
where cash flow is potentially an issue. Claims can be submitted to
HMRC with a company tax return. This usually has to be
submitted within two years of the company’s
accounting year-end. So for example, a company
with a 31st March 2019 year-end would have
to be submitted by the 31st March 2021. Repayment normally
takes four to six weeks, but this can vary
on busy periods. I hope this has been
a useful overview, giving you a bit of an insight
into video games tax relief. Feel free to contact me directly
using the details listed, or leave a comment below.

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