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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: 

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

  • 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 periods.

Example 

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

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

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

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