Saving time and maximising your relief are just two of the reasons you should consider working with a VGTR claim specialist when filing for Video Games Tax Relief.
Specialists aren’t always worth the money. It might seem like a strange thing for a professional services company to admit, but it’s true.
Some games studios can file their Video Game Tax Relief claim just fine without professional help.
Though I think it’s always valuable to have someone with financial expertise check your figures.
But if you’re new to Video Games Tax Relief, have a small team with little or no time to spare, or are working on a particularly complex game or project with expenditure across different regions and units, then hiring a claim specialist can be of real help.
Here are the five of the most important ways a Video Games Tax Relief specialist would add value to your studio.
If you’re looking to speak to a specialist now, or have questions about your claim, just get in touch!
1. Maximise your relief
Video Games Tax Relief works by giving you back a portion of your game development costs as a tax reduction or cash credit.
The more development spending you claim for, the more relief you’ll receive.
It might sound simple, but identifying, tracking and apportioning every eligible development cost your studio incurs over the course of a year takes time, and requires a deep understanding of the VGTR scheme.
The price of failure is high, too.
Claim too little and you could forfeit thousands of pounds of financial aid. Claim too much, and you may face a lengthy investigation from HMRC.
A claim specialist can rescue you from this precarious position. Using their in-depth knowledge of company finance and the VGTR scheme, a specialist will make sure that you’re claiming for every eligible penny possible, without breaking HMRC’s rules.
More pennies claimed means more pennies back, and extra capital to invest in your next blockbuster title.
2. Unlock more funding
You might be a video games studio, but that doesn’t mean you’re only allowed to claim Video Games Tax Relief.
There’s a whole range of government funding available for UK companies, from lucrative grant competitions to other kinds of tax relief.
For instance, if you’re working on a particularly innovative area of gaming, like cutting-edge VR or AR, you might qualify for SME R&D Tax Relief.
SME R&D Tax Relief reimburses companies up to 33.35% of their development costs; much more than the maximum of 20% offered by VGTR.
An expert claim specialist can identify other schemes available to you and then help you structure your various applications, so they’re all compatible and compliant.
Applying to multiple schemes is an excellent way to increase your funding windfall, but it’s a complicated business. Expert input is almost always required.
3. Skip the Culture Test
One of the most important parts of applying for VGTR is having your game certified as ‘culturally British’.
You obtain this certification by passing the Cultural Test, which gauges how much of your game’s content and development includes people and places from the UK or European Economic Area.
Your game needs 16 out of a possible 31 points to pass the test, which awards marks in four categories: cultural content, cultural contribution, cultural hubs and cultural practitioners.
To earn these points, you’ll need to supply a range of evidence like scripts, financial records, and in-game footage that prove that your game meets the test’s criteria.
Collecting evidence for the Cultural Test isn’t difficult necessarily, but it can eat up a lot of time. Especially when you’re new to the test and aren’t sure which documents you need to send in.
A VGTR specialist can save you days of effort, telling you exactly what documents you need, organizing them, and preparing a covering note for the BFI which spells out how your evidence matches the various points available.
A specialist can also zero in on which areas of the Culture Test you’re more likely to score points in, instead of looking to rack up marks at random.
This targeted approach cuts down on the amount of evidence you need to collect, freeing up even more of your time to focus on the more exciting parts of running a studio.
4. Shield yourself from enquiries
When you’re grappling with something complex like tax relief, it’s easy to make a mistake. Unfortunately, HMRC isn’t particularly forgiving when it comes to errors.
If you slip up in your VGTR submission, HMRC might launch what’s called ‘an enquiry’. Which is as time-consuming as they sound.
Enquirers are investigations into your development work designed to figure out whether your claim was accurate.
HMRC will ask you to supply additional evidence to corroborate your financial calculations. And you may be interviewed by a tax inspector.
Even if you supply all the right evidence, or find and admit your miscalculation straight away, an enquiry can delay your tax relief or cash credit by several months. And if you did make an error, it could damage HMRC’s trust in your future filings, meaning more enquiries in your future.
A VGTR specialist will protect you from HMRC’s wrath by filing a fully compliant, fully justified claim.
Also, having a specialist attached to your submission sends a signal to HMRC’s tax inspectors that it has been reviewed and approved by a professional. This makes it more likely that your claim will be processed quickly and smoothly.
5. Get Your Funding Faster
The final reason is that a claim specialist could help you access your Video Games Tax Relief much earlier than if you do it yourself, or work with a traditional accountant.
Some loan providers now offer a service where they will advance you up to 80% of your tax relief or cash credit months before you’ve filed, meaning you don’t have to wait around for HMRC.
Getting hold of your money sooner means you can bring forward new projects and staff hires, giving you a head start on the competition.
A well-timed cash injection can also help you in negotiations with investors, meaning you could capture more funding or sacrifice less equity in your studio.
Before qualifying for an advance, loan providers will ask you to work with a specialist like GrantTree, who will provide an opinion on whether you are eligible for VGTR, and how large your claim will be.
This opinion gives the provider confidence that you will be able to repay your loan when you receive your funding.
Ready to talk to a specialist?
So that’s it — my list of the five top ways a VGTR claim specialist can bring value to your studio.
If it sounds like working with a specialist might be the right choice for your studio, GrantTree’s VGTR experts are more than happy to chat about our service, fees and anything else you’d like to know.
Just drop us a message, and one of our team will be in touch with you soon!