New ‘Video Games’ Legislation

July 29, 2014

The Finance Act 2013, Schedules 17 and 18 (Tax Relief for Video Games Development) (Appointed Day) Order 2014 (SI 2014/1962) appoints 1st April 2014 as the date upon which the amendments made by Schedules 17 and 18 to the Finance Act 2013 come into force. Schedule 17 makes provision for Part 15B to be inserted into the Corporation Tax Act 2009 so as to provide for tax relief to be granted for video games development. Schedule 18 to the Finance Act 2013 makes consequential amendments. Authority for retrospective effect is given by paragraph 3(b) of Schedule 17 to the Finance Act 2013. The Order has effect in relation to accounting periods beginning on or after 1st April 2014.

The Cultural Test (Video Games) Regulations 2014 SI 2014/1958) introduce a points-based “cultural test” for video games. The purpose of the test is to determine whether a video game may be certified as a “British video game” by the Secretary of State under Part 15B of the Corporation Tax Act 2009. Points under the test are awarded on the basis of the setting, content, language and British cultural aspects of the game, where certain work on the game is carried out, and the residence or nationality of the personnel involved in the making of the video game. Certification as a British video game is a condition of eligibility for video games tax relief under that Act. The Regulations also prescribe the particulars and evidence that must be provided to the Secretary of State in support of an application for certification. They also make provision for the making of a statutory declaration on behalf of a company.