Latest Articles from VGTR Specialists

VAT on Steam sales. How does it work?

Fri, 11 Jul 2025 08:56:24 GMT

Here’s a brief summary of VAT on Steam sales:

�� VAT is included in the price

The price you see on the Steam store page already includes the VAT applicable in the player’s region.

�� Steam collects and remits VAT

Steam acts as the seller and is responsible for collecting the VAT from the end customer and then paying it over to the appropriate tax authorities in the various countries.

�� Developers don't need to register for VAT in multiple countries

As a result of Steam handling the tax collection, developers typically don't need to register for VAT separately for their sales on Steam.

�� Steam is the merchant of record

When you sell through Steam, Steam is the merchant of record. They’re the ones collecting the money, issuing invoices to players, and handling all the VAT in each country.

This means that you’re not the one making the retail sale. Instead, you’re effectively receiving a royalty or commission payment from Steam after their fees and any withholding tax.

�� Thinking of cutting out platforms and moving to direct sales?

If you’re considering moving to direct sales (like downloads from your own website), you’ll likely have to adopt the VAT One Stop Shop ("OSS") scheme. This can get complicated so make sure you take advice before you go down this path.

If you have any questions about this, or how to post Steam revenue and fees in Xero, feel free to drop me a message or head over to www.urbanledgers.co.uk.

#VGTR #VGEC #VideoGames #TaxRelief #VideoGamesAccounting #VideoGamesTax

What happens if HMRC opens an enquiry into your VGTR claim?

Wed, 11 Jun 2025 17:13:04 GMT

First things first: don’t panic .

An enquiry doesn’t mean your claim is being rejected — it just means HMRC wants to take a closer look.

In our experience, you should expect an enquiry to add an extra 3–6 months to your payout timeline.

Here’s how it usually plays out:

�� You’ll receive an initial round of queries — these tend to be broad and high level.

�� Once you respond, HMRC often follows up with a second round of more detailed, specific questions. Usually the enquiry is closed after this, but it’s possible that further questions may be asked.

It’s critical that your responses to HMRC are carefully and accurately formulated, and it’s crucial you seek your Accountant’s input here (or, ideally, have them respond on your behalf) given the tax legislation at play.

One frustrating part to note once a case worker at HMRC is assigned, your claim usually can’t be reassigned to another caseworker, even if your caseworker goes on holiday. So if your enquiry is opened around August or Christmas, expect even slower turnaround times.

The good news?

At Urban Ledgers, we’ve never had a claim denied following an enquiry (touch wood!) - they have all been paid out in full as per the submission.

So stay calm, respond thoroughly, and keep your Accountant close.

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What’s the likelihood of HMRC opening an enquiry into your VGTR claim?

Mon, 09 Jun 2025 10:06:48 GMT

It’s a question we’re hearing more often given we know HMRC investigations are on the rise, thanks to additional resourcing budgets at HMRC.

In our experience over the past two years, we’re seeing around 10–15% of VGTR claims being selected for enquiry.

That means most claims are processed without further questions.

But for that relatively small percentage, the enquiry process can delay your payment by at least several months, so it’s something to be aware of.

So what might possibly trigger an enquiry? While there’s no hard and fast rules, we tend to see them being opened in these scenarios:

�� It’s your first VGTR claim (and the claim might be sizeable)
�� The claim is made via a Special Purpose Vehicle (SPV)
�� The costs look unusually high for the size/stage of the project
�� Supporting documentation is missing or inconsistent

Sadly we have no control over HMRC selecting your claim, but you can definitely reduce the likelihood by ensuring your claim is correctly calculated within HMRC tax legislation and prepared by someone who knows what they’re doing.

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How long does it take for a VGTR/VGEC payout?

Tue, 06 May 2025 09:12:24 GMT

The burning question from every game studio submitting a claim:

When will we get our cash?

VGTR is a vital tool to support your studio’s runway so timing absolutely matters.

Before we dive in, two quick reminders (both covered in earlier posts):

1️⃣ You can claim more than once a year (please see this earlier article: https://www.urbanledgers.co.uk/how-can-i-claim-vgtr-more-than-once-a-year )

2️⃣ Your claim isn’t always paid in cash (please see this earlier article: https://www.urbanledgers.co.uk/are-vgtr-claims-always-paid-out-in-cash )

HMRC’s internal target is currently 40 working days to review (and ideally pay out) a VGTR claim.

If your claim includes all the right documents (including your BFI certificate and a clear, cumulative P&L), and no red flags are raised, the payment could land within 40 working days . The quickest we’ve ever seen? 5 working days. Incredible but, sadly, highly unusual. Most are around 35-45 working days currently.

But…

If something is missing or unclear, your claim will be rejected and the clock resets.
And if HMRC decides to take a closer look?

�� The claim will be passed to a Case Worker.
�� It may take 3+ months for initial queries to come through.
�� Those queries will usually be issued by physical letter (yes, really).

You’re more likely to see a quicker payout if:

✅ You’ve submitted under the same certificate before
✅ You’ve had a previous HMRC enquiry that was successfully closed
✅ Your studio has a straightforward corporate structure

Our advice?

For your first claim in particular, avoid baking in to your forecast the VGTR monies on the basis that they’ll be received within 40 working days. If HMRC opens an enquiry, your claim could be delayed by 3-6 months +.

�� To receive these articles straight to your inbox, feel free to sign up to our newsletter here: https://lnkd.in/e7aqfJ5n

We’ve released our game. Can we still claim VGTR on post-release costs?

Fri, 11 Apr 2025 09:00:01 GMT

Yes, you can.

But you’ll need to be very careful what you’re claiming for.

There’s a common misconception that once your game is released, you’re no longer eligible for VGTR. That’s not the case, but you need to tread carefully with the costs being claimed.

Here’s what you can’t claim for after launch:

�� Maintenance or support
�� Bug fixes, patches, or community management
�� Marketing / PR
�� Revenue share with platforms
�� Hosting, server, or operational costs
�� Depreciation or loan interest
�� Any costs not directly linked to core game development

So what can you claim?

✅ New content like DLC or expansions- this might qualify as a new production phase potentially requiring a new BFI Certificate. Best to discuss this with the BFI as early as possible to seek their view.

✅ Costs must relate to actual development: design, coding, art, audio, QA, etc.

Careful cost tracking is essential here.

If you’re planning post-release content, VGTR might still be on the table, but you might need to treat it as a new project from a claim perspective.

Don’t forget: When your game is complete, you must apply for a Final Certificate from the BFI - here’s the link to the application process: https://www.bfi.org.uk/apply-british-certification-expenditure-credits .

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Think all games qualify for VGTR? Not quite.

Tue, 08 Apr 2025 09:15:00 GMT

In today’s Decoding VGTR & VGEC post, we’re covering a core eligibility question:

Do all games qualify for VGTR?

In short: no .

As you’re probably aware, to claim VGTR/VGEC your game needs to pass the BFI certification process - the full details are here : https://www.bfi.org.uk/apply-british-certification-expenditure-credits/about-uk-creative-industry-expenditure-credits

Whether or not your game qualifies for VGTR will be decided upon by the BFI when reviewing your application based on the set criteria, but we can tell you this with certainty: the following will NEVER qualify:

�� Games with gambling elements or cash payouts
�� Games with explicit or adult-only content

Some developers worry their game might not pass because it’s not set in the UK, but don’t panic.

✅ A game can potentially still qualify if it’s set in a fictional or indeterminable location.

What about Free to Play games?

✅ These can qualify, as long as the BFI criteria are met.

⚠️ One to watch: if your game’s design later shifts to include gambling and/or payout features, VGTR eligibility stops at that point . HMRC is very strict on this and, if you submit a claim where you game includes these features, HMRC will look to slap you with potentially significant penalties.

�� To receive these articles straight to your inbox, feel free to sign up to our newsletter here: https://lnkd.in/e7aqfJ5n

Can we claim VGTR/VGEC before our game is even released?

Mon, 31 Mar 2025 16:01:11 GMT

Can we claim VGTR/VGEC before our game is even released?

Yes, you can.

This can be a massive game-changer for your studio’s cashflow and ultimately its overall viability.

If your studio is partway through development, you don’t need to wait until release (or early release) to make a claim.

You can submit a VGTR claim partway through development as long as you have an interim certificate from the BFI.

✅ No need to hit a certain spend threshold
✅ No need to wait until you’ve earned revenue
✅ No minimum claim amount, which is great for smaller studios

It’s one of the more flexible parts of the regime, and of critical importance to your studio’s runway, it means you can potentially unlock much-needed cash while you’re still building your game.

�� Just make sure your costs are posted correctly in your Accounting software (we recommend Xero) and the BFI interim certificate has been issued before submitting your claim.

�� Here’s a a link to the BFI application process: https://www.bfi.org.uk/apply-british-certification-expenditure-credits/cultural-test-video-games

�� To receive these articles straight to your inbox, feel free to sign up to our newsletter here: https://lnkd.in/e7aqfJ5n

Think your games co is too small to claim VGTR? Think again.

Wed, 26 Mar 2025 11:34:46 GMT

Is my micro games co too small to be eligible for VGTR?

If you’re worried that your small start up studio which employs just yourself and a co-founder (or even just yourself and say, a contracting artist) is too tiny to be eligible to claim VGTR, think again.

Any UK based games development company can claim VGTR, as long as you meet the BFI requirements, per this link:

https://www.bfi.org.uk/apply-british-certification-expenditure-credits/cultural-test-video-games ).

There is no de minimus when it comes to the core expenditure needed to make a VGTR claim.

It could be as little as £20k spend in a year, which, broadly speaking, would yield you a VGTR cash payout of around £4k. Not bad!

In short, if you’re a micro studio I’d absolutely recommend putting in a VGTR claim to help prop up your runway. It’s not just for the bigger players.

Are VGTR claims always paid out in cash?

Mon, 03 Feb 2025 15:18:13 GMT

In the latest post in our “Decoding VGTR & VGEC” series, I want to clear up some confusion about receiving cash from VGTR claims.

Games company founders and execs are sometimes surprised when they learn that VGTR claims are not always paid out in cash (especially when that cash is sorely needed to prop up the studio’s runway).

Let’s look at a high level studio lifecycle to help explain.

�� Pre-revenue / development phase

During the pre-revenue phase, the company will be operating at a loss. In this situation, VGTR will always be paid out in cash.

❗However - a note of caution here:

If you have any outstanding HMRC liabilities such as PAYE/NICs, VAT or Corporation Tax, HMRC will net the claim off against the outstanding liability. One to watch out for if you have HMRC debts.

�� Post Release

When the game has been released, you will hopefully start to see revenue coming in to the company. If your total costs are greater than the revenue (ie: you are operating at a taxable loss), you will still receive the VGTR claim in cash.

When the company starts operating at a profit, and therefore you have Corporation Tax payable, depending on the size of your taxable profit two things may happen:

Your VGTR claim will simply reduce the amount of your Corporation Tax due, and no VGTR cash will be received. However, you have received the benefit of a lower corporation tax bill; or
The VGTR claim will be of an amount whereby your Corporation Tax bill will be reduced to nil, and you will receive the residual portion of the VGTR claim monies in cash.

��Remember

VGTR claims are made as part of your Corporation Tax return. If there is corporation tax to pay, this will be payable first before any pro-rated VGTR claim can be paid in cash.

Time limits for submitting VGTR/VGEC claims to HMRC

Wed, 29 Jan 2025 14:21:53 GMT

Let's talk about time limits for submitting VGTR/VGEC claims to HMRC.

No, not yet - unless of course it makes financial sense to do so, in which case, yes you can. But you don't have to.

Clear as mud?

Here's the headlines:

ℹ️ If you wish, you could choose to adopt VGEC on expenditure incurred after 1 January 2024.

ℹ️ However > if your game is already in development, you can continue claiming under VGTR until April 2027.

ℹ️ For all new games for which development starts on/after 1 April 2025, you MUST claim under VGEC.

Does it make sense to move to VGEC now? It really depends on the structure of your studio and its operations, and your Accountant should undertake detailed analysis before a decision is made. Remember that:

�� Under VGEC the £1m subcontractor limit is removed, BUT
�� EEA expenditure will not count towards qualifying expenditure.
�� Only expenditure on goods and services “used or consumed” in the UK will be taken into account (more on this in another post).

Choosing to move to VGEC too early or too late could be a costly decision, so analysis of your studio's individual situation is key to work out if and when to move.

If you're worried you might miss one of our upcoming articles in the "Decoding VGTR & VGEC" series and would like these sent directly to your inbox, please feel free to sign up here:

https://lnkd.in/e7aqf J 5n

Do I have to adopt VGEC now?

Fri, 03 Jan 2025 19:11:55 GMT

Do you have to adopt VGEC now?

How can I claim VGTR more than once a year?

Tue, 03 Dec 2024 19:09:27 GMT

What better way to kick off our Decoding VGTR & VGEC series that talking about how to get cash in the door quicker and more frequently.

Here's the question we're covering today: Can you claim VGTR more than once a year? Well, the short answer is yes.

How can I claim more than once a year? ��

Put simply, you can shorten your Accounting Period with Companies House. As an example, let's say your most recent year end was 30 June 2024, and you submitted a VGTR claim for that year. Your next year end is therefore automatically set as 30 June 2025. Rather than wait until 30 June 2025 to submit your next VGTR claim, you could shorten your year end from 30 June 2025 to 31 Dec 2024. and submit a claim for the 6 months ended 31 Dec 2024.

There's obviously some rules about shortening accounting periods (for example, your first accounting period following incorporation must be between 6 and 18 months, your accounts must not be overdue for filing etc) but what's important to note here is that an accounting period can be shortened as often as you like, and many games studios take advantage of this.

Going back to our example above where you've shortened your year end from 30 June 2025 back to 31 Dec 2024. Once you've filed your 31 Dec 2024 accounts (and VGTR claim), your next scheduled year end is 31 Dec 2025 - however, you could shorten your year end again from 31 Dec 2025 back to 30 June 2025 to submit another VGTR claim in 6 months time.

What are the benefits in doing this? ��

Firstly, and most crucially, cashflow. It can make the difference between possible closure of your studio vs carrying on as normal. That's pretty huge. Claiming twice (or even three times!) a year means regular funds coming into the studio, sooner than they would if your accounting period was 12 months.

Secondly, if it's your first VGTR claim, submitting early acts as a great proof of concept with HMRC. HMRC have been known to select first claims for an enquiry, particularly if they're being made via an SPV, so it makes sense to submit a smaller claim earlier when you have available runway rather than waiting many more months when cash is tight and then potentially being held up by a HMRC enquiry.

What else do I need to know? ℹ️

It's important to remember that VGTR is claimed as part of your Corporation Tax Return, and your Corporation Tax Return must be filed with a set of Statutory Accounts. Therefore, if you change your year end, the usual filings will be required, ie: you can't just submit a VGTR claim in isolation.

Feel free to comment below or DM me if you'd like more info on any of this.

If you're worried you might miss one of our upcoming articles in the "Decoding VGTR & VGEC" series and would like these sent directly to your inbox, please feel free to sign up here:

https://lnkd.in/e7aq f J5n

Everything you've ever wanted to know about VGTR and VGEC

Fri, 01 Nov 2024 19:06:25 GMT

We're creating a new educational series ("Decoding VGTR & VGEC" - yes, I know, an ingenious title) about the ins and outs of VGTR/VGEC which will cover all of those non-obvious questions that we hear from our clients.

We'll be sure to cover all the good stuff, such as:

�� Is it better to claim under VGTR or VGEC?
�� Our game has been released. Can we still claim VGTR and for how long?
�� Is it still worthwhile claiming under a Special Purpose Vehicle (SPV)?
�� What are the headline changes coming in under VGEC?
�� What is the time limit for claiming VGTR/VGEC?
�� How long is it taking HMRC to pay out claims?
�� What happens if HMRC open an enquiry into my claim?

Honestly, the list just goes on and on. I'm so excited to be sharing our experiences and tips that we've gained over the years which will hopefully give some much needed guidance and clarity.

p.s. Once I actually work out how to do it, I'll be sharing a link to sign up for each post in this series to be delivered straight to your inbox. I'll bet that's going to be hard to resist ��

p.p.s Do you have any burning unresolved VGTR/VGEC questions that you'd like answered? Feel free to contact me and I'd be happy to add them to the list.

We’re Ukie’s Member of the Month!

Fri, 08 Mar 2024 15:50:20 GMT

A big shout out to Ukie for featuring us as Member of the Month in their newsletter yesterday!

As the specialist Accountants for the Games Industry, we were absolutely thrilled to win the highly-coveted Small Firm of the Year Award (London) at the Accounting Excellence Awards .

We want to pay these good feelings forward to our lovely fellow Ukie members, so we're offering a completely obligation-free consultation for games studios to chat about any accounting and tax matter that you'd like.

And...if you're a studio that hasn't taken advantage of VGTR (Video Games Tax Relief) yet, then PLEASE do get in touch - this can be an absolute game-changer from a cashflow perspective. There are no upfront costs and you never know, the funds from the tax relief might just save a few more layoffs.

Latest Articles from VGTR Specialists

VAT on Steam sales. How does it work?

Here’s a brief summary of VAT on Steam sales:

What happens if HMRC opens an enquiry into your VGTR claim?

First things first: don’t panic .

What’s the likelihood of HMRC opening an enquiry into your VGTR claim?

It’s a question we’re hearing more often given we know HMRC investigations are on the rise, thanks to additional resourcing budgets at HMRC.

How long does it take for a VGTR/VGEC payout?

The burning question from every game studio submitting a claim: When will we get our cash?

We’ve released our game. Can we still claim VGTR on post-release costs?

Yes, you can.

﻿

But you’ll need to be very careful what you’re claiming for.

Think all games qualify for VGTR? Not quite.

In today’s Decoding VGTR & VGEC post, we’re covering a core eligibility question: Do all games qualify for VGTR?

Can we claim VGTR/VGEC before our game is even released?

Can we claim VGTR/VGEC before our game is even released?

Think your games co is too small to claim VGTR? Think again.

Is my micro games co too small to be eligible for VGTR?

Are VGTR claims always paid out in cash?

In the latest post in our “Decoding VGTR & VGEC” series, I want to clear up some confusion about receiving cash from VGTR claims.

Time limits for submitting VGTR/VGEC claims to HMRC

Let's talk about time limits for submitting VGTR/VGEC claims to HMRC.

Do I have to adopt VGEC now?

Do you have to adopt VGEC now?

How can I claim VGTR more than once a year?

What better way to kick off our Decoding VGTR & VGEC series that talking about how to get cash in the door quicker and more frequently. Here's the question we're covering today: Can you claim VGTR more than once a year? Well, the short answer is yes.

Everything you've ever wanted to know about VGTR and VGEC

We're creating a new educational series ("Decoding VGTR & VGEC" - yes, I know, an ingenious title) about the ins and outs of VGTR/VGEC which will cover all of those non-obvious questions that we hear from our clients.

We’re Ukie’s Member of the Month!

A big shout out to Ukie for featuring us as Member of the Month in their newsletter yesterday!

The burning question from every game studio submitting a claim:

When will we get our cash?

In today’s Decoding VGTR & VGEC post, we’re covering a core eligibility question:

Do all games qualify for VGTR?

What better way to kick off our Decoding VGTR & VGEC series that talking about how to get cash in the door quicker and more frequently.

Here's the question we're covering today: Can you claim VGTR more than once a year? Well, the short answer is yes.