Corporation Tax Act 2009 section 1179FH

UK expenditure condition

Section 1179FH sets out the minimum UK expenditure requirement that a video game must satisfy in order to qualify for video games tax relief, and explains the consequences if the condition ceases to be met.

• At least 10% of the development company's total core expenditure on the video game must be UK expenditure.
• Before completion, the test is applied on an expected (projected) basis, as stated in the company tax return for each period; from the completion period onwards, it is applied on an actual basis.
• If the condition fails in any pre-completion period or in the completion period itself, relief is clawed back — the video game is treated as never having met the condition in any earlier period.
• The Treasury has power to change the 10% threshold by regulations.