Corporation Tax Act 2009 section 1217CF

Additional deduction for qualifying expenditure

Section 1217CF sets out how a video game development company can claim an additional tax deduction based on its qualifying expenditure on a video game, calculated within its separate video game trade.

• A company may claim an additional deduction in its profit or loss calculation for qualifying expenditure on a video game, as part of the video games tax relief
• Qualifying expenditure is limited to core expenditure directly related to the design, production, or testing of the video game
• Where sub-contractor payments exceed £1 million, the excess above that threshold cannot be included as qualifying expenditure
• HM Treasury has the power to amend the definition of qualifying expenditure by regulation, including specifying whether particular types of expenditure do or do not qualify