CREC092300 - Commencement and transition: European to UK expenditure (video games)

Minimum expenditure condition

If a video game previously claiming Video Games Tax Relief opts in to VGEC in an accounting period before the completion period:听

  • the European expenditure condition in section 1217EB CTA 2009 is to apply as if the video game had been completed in the period immediately听before the opt in period, and听

  • the UK expenditure condition in section 1179FH CTA 2009 is to apply only in relation to core expenditure incurred in the opt in period and subsequent听periods.

Example听

Company A is developing a video game. The company first claimed under VGTR in its accounting period beginning 1 July 2022, and听opted in to VGEC in its accounting period beginning on 1 July 2024.听

By 1 July 2024, Company A had incurred 拢80,000 core expenditure. Since then, it has incurred a further 拢20,000.听

The European expenditure condition under VGTR applies only to the 拢80,000 core expenditure incurred before Company A opted in to VGEC. The test is met as long as听Company A had incurred 拢20,000 European expenditure (25% of 拢80,000) on the video game before 1 July 2024.听

The UK expenditure condition under VGEC applies only to the 拢20,000 core expenditure incurred since Company A opted in to VGEC. The test is met as long as听Company A has incurred 拢2,000 UK expenditure (10% of 拢20,000) on the video game since 1 July 2024.听