With the granting of state aid approval, the full introduction of the long-awaited Video Games Tax Relief is imminent. 

What's the issue?

The UK's video games tax relief is intended to provide support to UK video game developers, giving qualifying video game development companies the opportunity to either reduce their UK corporation tax bill or, perhaps more importantly, receive a cash tax credit from the Government.  Originally targeted for introduction on 1 April 2013, delays to the relief – caused by delays in European state aid approval, in part due to fears that the relief might promote a subsidy race between Member States - have been much publicised, causing many to question whether the relief would ever be introduced.

What's the development?

With a few last-minute tweaks (most notably the extension of the tax relief to expenditure incurred in other European Economic Area countries), state aid approval was granted on 27 March 2014, which means that the tax relief, originally announced in the 2012 budget, will soon be introduced and will be available to UK companies incurring expenditure on the development of “culturally British” games which are intended for commercial release.

What does this mean for you?

For those who are eligible, this tax relief will provide welcome and long-promised support.  The tax relief will be backdated to development expenditure incurred by such companies on or after 1 April 2014 but, disappointingly, not to 1 April 2013 as was originally intended.

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