Corporation Tax Act 2009 section 1217DA

Restriction on use of losses while video game in development

Section 1217DA restricts how losses arising in the separate video games trade during the development phase can be used, limiting them to being carried forward against future profits of that same trade.

• Losses made in the separate video games trade during the pre-completion period (i.e. while the game is still in development) are restricted in how they can be used
• These losses cannot be set against other income or profits to reduce the company's tax liability in the period they arise
• The only permitted use is to carry the losses forward and set them against profits of the same separate video games trade in a later accounting period
• Even when carried forward, the amount that can be deducted is subject to the general loss restriction rules under section 269ZB of Corporation Tax Act 2010