Tax Chaos: Survey Shows Video Games Developers Not Aware Of New Tax Break Says Technology Accountant

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8 out of 10 video games developers were unaware of a recently introduced tax break “Video Games Tax Relief”, which came into force on 1 April 2014. Cost of missed tax break to Games Developers is estimated to be £15m and HMRC principally blamed for lack of awareness, says Metric Accountants.

“The lack of promotion of the VGTR scheme is ridiculous, as it defeats the purpose of introducing a clever way to boost skills, growth and employment."

Metric Accountants (, London's Technology and High Growth specialists, today announces depressing survey results which show the low level of awareness amongst developers of the Government's new tax break specifically designed to help the UK's Video Games industry.

Key survey findings:

  • 82% of respondents were not aware of Video Games Tax Relief (VGTR) or that their company may qualify for a Cash Rebate.
  • Of those that were not aware of VGTR, two thirds of respondents blamed HMRC for the lack of awareness of the new tax scheme. A significant minority thought their accountant was at fault.
  • Of the small percentage of respondents who were aware of VGTR, only two respondents were able to confirm the stiff requirements that must be met to qualify.

The survey demonstrates the need for HMRC, the accountancy profession and Games Developers’ organisations, such as TIGA (The Independent Game Developers' Association) to increase awareness of this new scheme.

HMRC’s published research shows that tax inspectors expect cash payouts under the scheme to be £15 million lower this tax year than in subsequent years, due to lack of awareness. (Source: HMRC “Video Games Tax Relief”, Summary of impacts, )

“This new tax break came into effect on 1 April this year but was first announced back in 2013, so there should be much greater awareness of this fantastic opportunity to claw cash back. The lack of promotion of the VGTR scheme is ridiculous, as it defeats the purpose of introducing a clever way to boost skills, growth and employment," said James Richardson, Technology Accountant at Metric Accountants.

"Due to the complexity of the VGTR, it’s really important that Games Developers start working with their accountants and tax advisors as soon as possible, otherwise they may find that their expenditure does not meet HMRC’s requirements," Richardson noted.

The survey results are based on discussions with 48 respondents. There are estimated to be 300 Video Games Developers in the UK.

For press enquiries, please contact Mr. James Richardson (Technology Accountant) on 0044 (0)203 542 4990.

About Metric Accountants:
Metric is the only London-based professional accountancy firm to focus solely on providing specialist tax and finance advice to high growth companies and tech start-ups. It is for this reason that Metric has been described as “The first choice for London’s innovative companies”.

About VGTR:
Video Games Tax Relief (VGTR) is available for expenditure incurred from 1 April 2014. If the company qualifies to claim VGTR it will be entitled to an additional deduction in computing its taxable profits. Where an additional deduction results in a loss, the company will be entitled to surrender losses for a payable tax credit (i.e. a cash rebate).

A company will be entitled to claim VGTR if:

  • The video game passes the ‘cultural test’. The Treasury has published regulations that will determine whether a video game passes the ‘cultural test’.
  • The video game is intended to be sold;
  • At least 25% of core expenditure is incurred on goods or services that are provided from within the European Economic Area (EEA).

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James Richardson
since: 03/2010
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