Video Games Expenditure Credit (VGEC)

Video Games Expenditure Credit (VGEC)

Offers the Video Games Expenditure Credit for United Kingdom game studios, rewarding qualifying video game development spend.

The Video Games Expenditure Credit (VGEC) is an above-the-line expenditure credit administered by HM Revenue and Customs (HMRC), replacing the previous Video Games Tax Relief (VGTR) from 1 April 2025. The credit rate is 34% of qualifying UK core expenditure on the development of a qualifying video game. VGEC is classified as an above-the-line credit — similar in architecture to the Research and Development Expenditure Credit — meaning it appears as taxable income in a company's profit and loss account, whereas the legacy VGTR operated through a surrenderable-loss mechanism.

To qualify, a video game development company must pass the BFI Cultural Test, spend at least 10% of total core expenditure in the UK, and incur a minimum of £1 million in UK core expenditure. The credit applies only to companies that develop qualifying video games; publishers, distributors, and hardware manufacturers are excluded. Claims are filed through the Corporation Tax return (CT600). BFI certification must be obtained before a VGEC claim can be submitted.

VGEC became mandatory for all new qualifying video game productions from 1 April 2025. Games in development before that date may remain on the legacy VGTR scheme until the sunset date of 31 March 2027, after which the old VGTR mechanic is permanently closed. No competitive application process exists: eligible companies simply claim through their annual Corporation Tax return once BFI certification is in place. The transition mirrors the broader 2024–2025 reform of UK creative industries tax incentives under which AVEC and VGEC replaced the prior family of production tax reliefs.