What is the UK Video Games Expenditure Credit?

A UK tax credit worth 34% of qualifying expenditure on developing a game certified as British through the BFI cultural test. It replaced Video Games Tax Relief for new games from 1 April 2025.

When does Video Games Tax Relief end?

VGTR closed to new games from 1 April 2025. Games already in development could stay in it until it ends in April 2027; HMRC states the former reliefs cease on 1 April 2027.

Does outsourcing abroad qualify for VGEC?

Generally not for the claim itself, because relief is tied to goods and services used or consumed in the UK. Work outside the claim, such as prototypes, ports or post-launch LiveOps, can still be outsourced.

How much is VGEC worth?

The headline rate is 34% of qualifying expenditure, capped at 80% of core expenditure. The credit is taxable, and the BFI describes it as equivalent to 25.5% under the previous system.

Does my game need British certification?

Yes. The game must pass the BFI's cultural test, which considers content, where work takes place and who does it, to be certified as British for VGEC.

UK Video Games Expenditure Credit (VGEC) Explained

The short answer

The UK Video Games Expenditure Credit (VGEC) gives companies a credit of 34% of qualifying expenditure on developing a game that is certified as British through the BFI's cultural test. It replaced Video Games Tax Relief for new games from 1 April 2025, and the old relief ends in April 2027. Relief applies to spending on goods and services used or consumed in the UK, so development done abroad generally does not count. Rules are detailed, so get professional advice before relying on a claim.

Key facts

Item	VGEC
When it applies	Expenditure from 1 January 2024; mandatory for new games from 1 April 2025
Headline rate	34% of qualifying expenditure; the credit is taxable, and the BFI describes it as equivalent to 25.5% under the old system
Qualifying expenditure cap	80% of core expenditure
Certification	The game must pass the BFI cultural test to be certified as British
Where the spend happens	Core expenditure on goods and services used or consumed in the UK, with a minimum UK share
Subcontracting	The previous GBP 1 million per-game subcontracting cap was removed; connected-party costs must be at arm's length
Old relief (VGTR)	Games in development could stay in VGTR, which ends in April 2027

Who can claim

The credit is claimed by the company responsible for designing, producing and testing the game, through its corporation tax return. The game must be intended for supply to the public and certified as British by the BFI, which assesses cultural content, where work takes place and who works on it. Core expenditure means costs of designing, producing and testing the game, not concept work before development or maintenance after release.

What it means for outsourcing

This is the part UK studios most often ask us about. Because relief is tied to goods and services used or consumed in the UK, development work done by teams outside the UK generally does not count toward the credit. That changes the maths of outsourcing:

Work inside the claim done abroad loses the credit, so its effective cost is compared with the UK cost minus the credit.
Work outside the claim still makes sense to outsource: pre-production prototypes, post-launch LiveOps, ports and games that would not qualify for certification anyway.
Capacity is often the deciding factor: when a UK team cannot hire fast enough, a partner may still be the only way to hit a launch date.

A useful exercise is to split the project into work streams, mark which are inside the claim, and compare the true cost of each option. Our article on in-house vs outsourcing costs gives a framework.

Other UK support

Beyond the credit, the UK Games Fund supports early-stage developers with grants and programmes, and TIGA, the UK games trade association, publishes guidance and advocacy on tax and funding. Our guide to funding an indie game covers grants and publishers.

Practical steps for a claim

Check the game can pass the BFI cultural test early, before production starts.
Track core expenditure by category and by where it is incurred.
Keep contracts showing where subcontracted work is done and at what price.
Apply for interim and final British certification through the BFI.
Claim through the company tax return with professional support.

A worked example (illustrative)

Imagine a UK studio planning a game where most production happens in the UK, plus three extra pieces of work: an early prototype to pitch to a publisher, a later port to another platform, and live operations for a year after launch. The prototype is pre-production concept work, the port may fall after the game's release, and live operations are post-release maintenance, so all three may sit outside the core expenditure of the claim. Those are natural candidates for a partner, while the main production stays in the UK and keeps its credit. An adviser can confirm exactly where the lines fall for a specific project.

Common misunderstandings

The credit is not a grant paid up front; it is claimed through the tax return.
Not every cost counts: pre-production concept work and post-release maintenance are usually outside core expenditure.
Certification is about more than language or setting; where and by whom work is done also matters.
Rules changed in 2024 and 2025, so older guides about VGTR and EEA spending can mislead.

How we work with UK studios

We work with UK studios and publishers on prototypes, ports, LiveOps, art and full builds that sit outside or alongside tax-credit claims, and we are happy to plan a split that keeps qualifying work in the UK. See our UK page or co-development services. This article is general information, not tax advice.

Sources: HMRC: Creative Industries Expenditure Credit manual · BFI: about UK creative industry expenditure credits · HM Treasury: response on audio-visual tax reliefs · TIGA: UK games trade association · UK Games Fund. Checked October 20, 2026.

UK Video Games Expenditure Credit: how it works