Corporation Tax Act 2009 section 1217EB

The EEA expenditure condition

Section 1217EB sets out the conditions relating to UK expenditure that a video games development company must satisfy in order to claim video games tax relief, both during interim accounting periods and upon completion or abandonment of the video game.

• A company claiming video games tax relief must include in its tax return for each interim period a statement of the planned amount of UK expenditure, showing that the expenditure condition in section 1217CE is expected to be met on completion.
• If it becomes apparent during development that the amount of UK expenditure on completion will be too low to meet the condition, the company loses eligibility for all periods and must amend its tax returns accordingly.
• When the video game is completed or abandoned, the company's tax return for the final period must include a statement confirming completion or abandonment and a final statement of the actual UK core expenditure incurred.
• If the final statement shows that UK core expenditure is too low to satisfy the condition, or no final statement is provided, the company loses eligibility for all periods and must amend any tax returns in which relief was previously claimed.