The UK video games tax relief has now been awarded state aid approval by the European Commission and the legislation needed to implement the tax relief is being taken forward now by the Government. The Draft Finance Bill 2014 was published on 27 March 2014 and DCMS will be publishing a final draft of The Cultural Test (Video Games) Regulations 2014 later in the year.
The certification unit at the BFI will now be accepting draft online applications for video games under the cultural test. Video games can qualify as British through the cultural test only.
Applicants are able to submit a draft pre-approval application online for the cultural test to the BFI certification unit. They will receive a letter of comfort, signed on behalf of the Secretary of State by DCMS.
While the pre-approval letter of comfort cannot be used to submit a claim to HMRC, it offers assurance that once the regulations come into force later in the year, the legal certificate will then be issued by the BFI. This will involve the pre-approval letter of comfort and application being re-submitted as a hard copy application, with a statutory declaration and a certificate will be issued. Once the legislation has gone through Parliament later in the year, companies will be able to submit tax relief claims with HMRC and they will be able to do this on expenditure backed-dated to 1 April 2014.
The cultural test for video games
Qualifying your video game as British under the cultural test for video games enables you to apply for the UK video games tax relief.
To apply for the cultural test, there must be one video games production company (VGDC) that is registered with Companies House and within the UK corporation tax net. The VGDC must be set up before design work begins and have responsibility for all aspects of the video game making process from design through to testing and delivery.
The cultural test is a points-based test where the project needs 16 of a possible 31 points to pass. It comprises of four sections:
- Cultural content (up to 16 points).
- Cultural contribution (up to 4 points).
- Cultural hubs (up to 3 points).
- Cultural practitioners (up to 8 points).
Applying for British video games certification
Applicants can apply for interim certification once all the legislation procedures are complete. Until then, the Certification Unit will accept draft applications and will issue a letter of comfort. Interim certification is essential if you wish to claim video game tax relief during production. The Interim certificate will be valid for three years, beginning on the date specified on such certificate.
A final application must be submitted once the video game is complete; applications for a final certificate should therefore not be submitted prior to completion of a video game. A video game is completed when it is first in a form in which it can reasonably be regarded as ready to be made available to the general public.
The online application form below can be used for interim and final certification.
Please read the draft guidance notes which will help you complete your application.
To make an application, please proceed to the online application form below:
Please note a statutory declaration is not required during the draft pre-approval application process, this will only be required once you apply for your interim or final application once Royal Assent and secondary legislation has been formalised later in the year/
You will be asked to set up an account before completing the application form.
If you are applying for Interim Certification online, your account will allow us to pre-populate your responses into the Final Certification application form. When you are ready to apply for Final Certification, you will be able to review and amend your answers which we hope will facilitate swift completion of the form and provide an enhanced applicant experience for you.
To access in-progress and submitted applications, you can log in to your account by clicking on the link below:
The BFI requires additional supporting material to complete its assessment of your application. The following documents are requested and can be attached to your online application form:
- Video game scripts or equivalent (if applicable) to demonstrate language and content.
- Complete treatment, game design documents or synopsis of the video game.
- Video game schedule/production schedule.
- Production budget/final cost report – the most up-to-date copy of the total long-form budget.
- A copy of the chain of title/writers agreement – the most up-to-date (only if applying for points under section A3(b) to demonstrate the video game is written by a British/EEA citizen or resident).
If you are applying for Final Certification we will also require a disc copy of the finished project and a hard copy of the accountant’s report if you are applying for points in sections C and D.
The application form with the Statutory Declaration and any supporting documents must be sent to:
The Certification Unit , British Film Institute, 21 Stephen Street , London , W1T 1LN.
We will be happy to discuss your application in person or via phone or email. Telephone Anna Mansi, BFI, Head of Certification, on +44 (0)20 7173 3214 or email email@example.com.