Video Games Accountants

Accountants for video game developers, indie studios, publishers and esports businesses. TaxDigit works with UK games companies on the Video Games Expenditure Credit, R&D relief, Patent Box, share schemes and the day-to-day finance function that turns a studio into a business.

Video Games Expenditure Credit (VGEC)

VGEC replaced Video Games Tax Relief. It is an above-the-line credit of 34% on qualifying expenditure, worth roughly 25.5% after corporation tax, with qualifying expenditure capped at 80% of core expenditure.

• UK expenditure test — VGEC looks at expenditure used or consumed in the UK. This is a real change from VGTR, which tested UK or EEA spend, and it moves the answer for studios with European contractors.
• Certification — the game must pass the cultural test and be certified as British, with an interim certificate available during development and a final certificate on completion.
• Core expenditure — designing, producing and testing the game. Initial concept work and post-release debugging and maintenance sit outside.
• Separate trade — each qualifying game is treated as a separate trade of the video games development company, so the accounting needs to be built that way from day one.

The VGTR to VGEC transition

Video Games Tax Relief is closed to new claims and the legacy regime ends entirely from 1 April 2027. Studios with titles that began under VGTR need to model both bases, because the cash profile and the qualifying-spend definition are not the same. Leaving it until the last accounting period is how relief gets lost.

R&D relief alongside — and the line between them

Games work frequently involves genuine technological advance: engine and tooling work, novel rendering or netcode, performance on constrained hardware, machine learning systems. That can qualify for R&D relief, but the same expenditure cannot be claimed twice, so the split between VGEC-qualifying game costs and R&D-qualifying technology costs has to be deliberate and documented.

• Merged R&D expenditure credit — 20% headline credit for accounting periods beginning on or after 1 April 2024.
• Enhanced R&D Intensive Support (ERIS) — for loss-making SMEs whose qualifying R&D is at least 30% of total expenditure: an 86% additional deduction and a 14.5% payable credit. Pre-revenue studios are often exactly this shape.
• Patent Box — a 10% effective corporation tax rate on profits attributable to patented technology, subject to the nexus rules.

Funding, equity and people

• SEIS and EIS — advance assurance, compliance statements and the share structure investors expect, for studios raising their first or second round.
• EMI options — the standard way to keep senior developers without cash you do not have yet.
• Publisher and platform income — revenue recognition on milestone payments, minimum guarantees, recoupable advances and storefront revenue shares.
• Withholding tax — royalties and platform payments from overseas, and reclaiming or crediting foreign tax deducted at source.

VAT for games and digital sales

Where you sell direct to consumers rather than through a storefront, the place of supply for digital services is the customer's country. That means non-UK VAT obligations, usually handled through the EU One Stop Shop registration or local registrations, and a decision about whether the storefront is acting as principal. We set the treatment before the first sale, not after an assessment.

Who we act for

• Indie and mid-size development studios, pre-revenue and post-launch
• Publishers, porting houses, QA and localisation businesses
• Esports teams, tournament organisers and content businesses built around games
• Individual developers, contractors and streamers — see influencer and content creator accountants

Games sits inside our media, entertainment and creative industries practice, alongside film and TV production and creative agencies and studios.

Frequently asked questions

What is the Video Games Expenditure Credit worth?

VGEC is a 34% credit on qualifying expenditure, worth about 25.5% of that spend after corporation tax. Qualifying expenditure is capped at 80% of core expenditure, and the game must be certified as British by passing the cultural test.

What changed when VGTR became VGEC?

Two things matter most. The relief moved to an above-the-line expenditure credit rather than an additional deduction, which changes how it appears in your accounts, and the qualifying spend test narrowed from UK or EEA expenditure to UK expenditure only. VGTR is closed to new claims and ends entirely from 1 April 2027.

Can we claim VGEC and R&D relief on the same game?

You can claim both reliefs in the same company, but not on the same expenditure. The practical work is separating game development costs that belong in the VGEC claim from technological R&D costs that belong in the R&D claim, and documenting that split contemporaneously.

We are pre-revenue and loss-making. Is there anything for us?

Very likely. Enhanced R&D Intensive Support gives loss-making SMEs an 86% additional deduction and a 14.5% payable credit where qualifying R&D is at least 30% of total expenditure — a common profile for a studio in development. VGEC is also payable in cash where the company has no corporation tax to set it against.

Do we need an interim certificate from the BFI?

If you want to claim before the game is complete, yes. An interim British certificate supports claims during development; a final certificate is required once the game is finished. We prepare the accounting evidence the application depends on.

How is income from Steam, consoles and app stores taxed?

It is trading income, but the mechanics matter: whether the storefront acts as principal or agent decides your VAT position, and overseas platforms may withhold tax at source that you can often credit or reclaim. We set this up when you launch rather than unpicking it later.

Can you help us raise investment?

Yes — SEIS and EIS advance assurance, compliance statements, the share structure, EMI option schemes for the team and the financial model investors ask for.