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Part 15B Ch 2 S1217B-S1217BE Corporation Tax Act 2009 (CTA 2009)

Where a company is a Video Games Development Company (VGDC) (with a qualifying video game to which the conditions for VGTR are met) (VGDC10110) for the purposes of Part 15B CTA 2009, the development of each video game is treated as a separate trade.

A video game includes the core programme and any additional software produced within an individual contract for that video game. »Ê¹ÚÌåÓýappre can be a number of different parts of a game which are supplied separately and these are treated as a single video game (VGDC10100). See VGDC20130 for further details.

For each video game, the profits and losses must be calculated separately. Also, the rules applying to a trade should be applied to each video game.

In producing their statutory accounts, VGDCs can account for their costs and income in a number of ways. This will vary according to their operating model and how they think best represents a true and fair view of the business.

»Ê¹ÚÌåÓýapp rules for Video Games Tax Relief (VGTR) therefore set out a consistent approach to calculating taxable profits of VGDCs which applies regardless of whether or not VGTR is claimed in respect of a video game. This approach is important when considering relief for losses.

»Ê¹ÚÌåÓýappre are special provisions which restrict the ways in which losses arising from a video game development trade can be used and this will vary depending on whether or not the video game has been completed and the trade has ceased (VGDC20110).

»Ê¹ÚÌåÓýapp Part 15B CTA 2009 basis applies a revenue treatment to income and to certain types of expenditure that would otherwise be treated as capital expenditure (VGDC20200).