Corporation Tax Act 2009 section 1217AB

Video games development company

Section 1217AB defines what a video games development company is for tax purposes and establishes the rules for determining which company qualifies when more than one company is involved in developing a video game.

• Only one company can be the video games development company for any given video game — it must be responsible for the game's development and actively engaged in planning and decision-making during design, production and testing, as well as directly negotiating, contracting and paying for rights, goods and services.
• Where more than one company meets these conditions, the company most directly engaged in those development activities is treated as the video games development company for that game.
• It is possible that no company qualifies as the video games development company for a particular video game.
• A company may elect in its corporation tax return not to be treated as a video games development company; this election applies to games that begin production in that accounting period or any subsequent period, and can only be reversed by amending the return.