Video Games Tax Relief
Specialist tax support for game developers and interactive media studiosDeveloping a video game is a complex and creative process that often requires significant investment long before a project reaches players. Concept design, programming, artwork, animation, voice acting, testing and localisation all contribute to costs that build throughout the development cycle. Video Games Tax Relief provides a way to recover part of these production costs and strengthen the financial stability of game studios of all sizes.
The relief supports both independent studios and larger development teams. It has become an important part of the United Kingdom creative industry framework and continues to offer significant benefits for qualifying games. With the government confirming ongoing support for creative reliefs, now is an ideal time for studios to review their development pipeline and ensure they are making full use of the relief available.
Improves cashflow during long development cycles
Games often take years to develop. Relief can provide a vital cashflow boost at key stages.
Supports independent and emerging studios
Smaller teams often rely on Video Games Relief to help cover development costs and grow sustainably.
Helps fund innovation and technical creativity
The relief supports games with strong cultural, artistic or creative content, encouraging original and ambitious projects.
Who can claim
Claims must be made by a Video Games Development Company. This is the company that is responsible for designing, producing and testing the game, and that negotiates contracts, employs the development team or commissions work.
The company must be within the United Kingdom Corporation Tax regime. Many studios already operate through suitable structures, although in some cases a special purpose company may be helpful to ring fence a particular game or series. We can advise on the best approach based on your development plans.
What games qualify
A qualifying game must:
• Be intended for commercial release
• Be designed for the general public or a specific gaming market
• Not be created solely for advertising, gambling or training purposes
• Pass the Video Games Cultural Test or be certified under a co-production treaty
The rules accommodate a wide range of genres, including action, strategy, puzzle, simulation, narrative, adventure, sports and role-playing games. Both digital and physical releases qualify.
Projects that involve significant artistic design, narrative content, original characters or immersive environments often score strongly under the cultural test.
What costs are covered
Video Games Relief focuses on core expenditure directly related to game development. This often includes:
• Concept development and game design
• Artwork, animation and modelling
• Programming and systems development
• Voice acting, music, scripting and audio production
• Level design and world building
• QA testing and debugging
• Localisation and adaptation work
Marketing, customer support, user acquisition, financing costs and non production administrative overheads are excluded. We assist in mapping your cost schedule to HMRC’s definitions so that qualifying expenditure is identified correctly.
How the relief works
For each accounting period, the Video Games Development Company identifies its core expenditure and determines how much of it relates to goods or services used or consumed in the United Kingdom. An enhanced deduction is applied at 80 percent of the lower of total core expenditure or the UK proportion.
When this calculation creates a loss, the company may surrender part or all of that loss for a payable credit. This credit can be particularly valuable for games in mid development or for studios managing multiple active projects. We guide you through building a clear cost structure, calculating the enhanced deduction and incorporating the relief into your Corporation Tax return.
How Davenports Can Help
Video Games Tax Relief requires precise cost tracking and clear documentation of development activity. Our aim is to make the process straightforward so that studios can focus on creativity and production.
We begin by reviewing your development structure, current projects and future plans. This helps us identify which games meet the qualifying criteria and whether you would benefit from a dedicated development company for a specific title.
We then work with your production accountant or finance lead to organise expenditure, review cost schedules and prepare the enhanced deduction calculations. Once the figures are confirmed, we produce the supporting schedules and submit the claim through your Corporation Tax return. If HMRC request further detail, we handle these queries on your behalf.
Our ongoing service ensures that claims remain accurate as your development pipeline evolves.
Start with a complimentary eligibility review
If your studio is planning a new game, part way through development or reviewing completed projects, we can help you determine whether Video Games Tax Relief is available.
Our complimentary eligibility review highlights qualifying projects and provides clear next steps.