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Example

AW Games Ltd incorporates and begins work on a new video game on 1 January 2024. The company’s year end date is 31 December.

In the period running until 31 December 2024, the company spends £45m on the game. Of this, £40m is spent on development activities and is core expenditure, while £5m is non-core. Of the core expenditure, £30m is spent in the UK, while £10m is non-UK expenditure. The company has no excluded expenditure.

The company applies to the British Film Institute (BFI) for an interim British cultural certificate in August 2024, and receives the certificate shortly after.

AW Games Ltd has until 31 December 2026 to make a claim for its first period (CREC085000).

Before submitting its tax return to HMRC, the company must complete the online additional information form (CREC081000).

The amount of expenditure credit that AW Games Ltd can claim is calculated as follows, following the process outlined in CREC060000 and s1179CA Corporation Tax Act 2009:

Step 1: AW Games Ltd’s relevant global expenditure is £40m.
Step 2: £10m of non-UK spend is deducted: £30m.
Step 3: Qualifying expenditure to date is £30m.
Step 4: Qualifying expenditure for the period is £30m.
Step 5: The credit amount is £10.2m.

When completing the CT600 (see CREC082000), £10.2m is the amount that should be entered in box 541 (or box 540, if the software used does not support box 541). This then feeds into boxes 545 and 570.

The company has not received any surrendered credit from a fellow group company, so it does not need to use box 614.

The company should tick boxes 650 and 658 to confirm it has completed an additional information form.

The company is only claiming an expenditure credit. It is not claiming any of the creatives tax reliefs (eg. Video Games Tax Relief), so it does not need to use boxes 663 and 665.

Box 886 (or box 885, if the software ued does not support box 886) will be the final amount of credit payable to the company, which is determined by following the credit redemption steps at s1179CC (see CREC070000). The amount depends on the company’s profit/loss position, its overall tax liabilities, and the applicable Corporation Tax Rate.Ìý