Tax credits for games

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Paid back for making games

Some countries pay back part of what a game costs to make, through the tax system. In the UK it is the Video Games Expenditure Credit (VGEC), for money spent from 1 January 2024.

Theo works out what Shard Garden's next game could claim, so the forecast can count it.

The rules

GOV.UK sets them out:

The credit is 34% of qualifying expenditure.
Only core costs count: "designing, producing and testing the game."
At least 10% of core costs must be spent in the UK.
Qualifying expenditure is the lower of 80% of all core costs and the UK core costs.
The game must pass a cultural test to be certified as British, run by the British Film Institute.

Do the math

the next game
Core costs   £1,000,000In the UK    £1,000,000Credit rate         34%

What credit can Theo expect?

  1. £272,000
  2. £340,000
  3. £800,000
Show the answer

£272,000

Qualifying expenditure is the lower of 80% of core costs (£800,000) and the UK core costs (£1,000,000): £800,000. 34% of that is £272,000.

Work done abroad

Shard Garden hires an art studio in another country, as in the outsourcing lesson. Its work is a core cost, but not a UK one.

The 80% cap and the UK rule work together: whichever is lower decides the claim.

Do the math

with art made abroad
Core costs   £1,000,000In the UK      £500,000Credit rate         34%

Half the core costs are now spent abroad. What credit can Theo expect?

  1. £170,000
  2. £272,000
  3. £340,000
Show the answer

£170,000

80% of core costs is £800,000, but only £500,000 was spent in the UK. The lower one counts: 34% of £500,000 is £170,000.

Not all of it is kept

GOV.UK: the credits are "taxed at the main rate of Corporation Tax", so the studio keeps less than the full amount. The credit first pays off the studio's Corporation Tax bill, and what is left is paid to the company.

Theo puts the credit in the forecast after tax, in the month it is expected, and never before the claim is made.

Quick check

Kai asks whether the launch trailer can count towards the credit. It can, because the trailer is about the game.

Show the answer

False

Only core costs count: designing, producing and testing the game. Marketing it is not one of them.

On the studio board

The studio adds a decision to the board:

Each game is checked against the cultural test before work starts. Core costs are recorded by country from day one. The credit enters the forecast after tax, never before the claim.

Bolt says: Next: board meetings.

Fact-checked 12 October 2026