Corporation Tax Act 2009 section 1217BC

Costs of the video game

Section 1217BC defines what counts as costs of a video game for tax purposes and sets out when those costs are treated as incurred.

• Costs of a video game include expenses on designing, producing and developing the game, as well as activities to exploit (i.e. make commercial use of) the game
• These costs are brought into the calculation of the company's taxable profits, unless they are specifically prohibited or limited elsewhere in the Corporation Tax Acts
• Where the video game is treated as a capital asset of the company, expenditure that would normally be classified as capital in nature is instead treated as revenue expenditure for the purposes of this chapter
• This revenue treatment ensures that development costs are not blocked from relief simply because the video game is a capital asset in the company's hands