VGTR vs VGEC: Which One Should You Actually Use?

If you’re building a video game in the UK, there’s a decent chunk of tax relief available.

But the rules just changed - and now there are two schemes to think about:

VGTR (Video Game Tax Relief)

VGEC (Video Games Expenditure Credit)

On paper, VGEC looks better. In reality? It’s not that simple. Let’s break it down properly.

What Are These Schemes Trying to Do?

Both VGTR and VGEC exist to support UK game development.

To qualify, your game needs to:

- Be intended for public release

They both cover similar costs:

- Design

- Production

- Testing

So far, so similar.

VGTR (The “Old” Scheme - Still Very Relevant)

25% relief (if your development makes a loss, HM Revenue and Customs (HMRC) can give you a cash refund equal to 25% of your surrendered losses)
Not taxable (this is important)
Allows UK + EEA costs
£1m cap on subcontractor costs
Available for games started before April 2025
Ends March 2027

VGEC (The “New” Scheme - More Flexible, But With Trade-Offs)

34% headline rate (the gross percentage of qualifying UK development expenditure that you can claim as a tax credit)
Effective rate ~25.5% after tax (An effective after-tax rate of ~25.5% means that for every £100 of qualifying UK expenditure you spend on developing your game, you will receive £25.50 in real-world, net financial benefit)
Taxable credit
No subcontractor cap
Only UK subcontractor costs qualify
Applies from January 2024 onwards