How can VGTR help the gaming industry through Coronavirus?

Despite a significant spike in gaming during the lockdown period, the UK gaming industry has still been hit by the coronavirus pandemic and uncertain times lie still ahead.

Remote working is hindering the creative process for many small and medium-sized businesses, meaning that productivity is on the downturn. On top of this, businesses are cutting down on advertising, and in turn gaming companies who rely on advertisements for revenue are facing imminent challenges.

Video Games Tax Relief (VGTR) claims could be the lifeline that struggling businesses are looking for in the current climate.

What is Video Games Tax Relief?

Video Games Tax Relief has been available to businesses in the UK for 6 years now and since then a staggering £324 million has been paid out by HMRC across 1,110 claims.

Given that qualifying companies can claim up to 20% of production costs back, the relief is a really valuable incentive for British game production companies, and could help to ease. pressures during these challenging times.

Do I qualify?

To be eligible for the relief, your game must meet a certain criteria. Firstly, your production has to pass a British Film Institute (BFI) cultural test and has to be intended for supply to the public.

On top of this, a minimum of 25% of your core expenditure designing, producing, and testing the game, must be within the European Economic Area. If your game has ticked off all of the above, it’s more than likely that you will be eligible to claim.

Will Coronavirus affect my claim?

The Independent Game Developers Association (TIGA) have urged the government to process VGTR claims in a swift and efficient manner after some members claimed that there have been delays in the processing of claims.

The relief could act as a real lifeline for companies finding themselves in unchartered waters at the moment. Having claims processed more swiftly, would boost cashflow and enable businesses to have more of a resilient edge during these unprecedented times. Although HMRC has confirmed that no delays should be expected, HMRC has provided some pointers, to ensure your claim runs smoothly:

• Make sure your CT600 tax return has been completed correctly
• Have a copy of your BFI cultural certificate
• Ensure your statutory accounts and computations are complete accurately

If you still haven't heard from HMRC about the progress of your claim after the 28 day threshold, you can contact the creative industry tax department here.

How can we help?

Our Tax Reliefs and Incentives team are here to support you through these challenging times. If you think you might be eligible for VGTR, or have any questions about the relief, get in touch and see how we can help.