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<p>The government will set out the detail of the Video Games Expenditure Credit (VGEC)
alongside draft legislation in Summer 2023 and welcomes feedback. After this is published,
the government will provide thorough guidance and education about how VGEC will work.</p><p>
</p><p> </p><p>It was announced at Spring Budget 2023 that VGEC will be introduced
from 1 January 2024. VGEC will be calculated directly from qualifying expenditure
and have a credit rate of 34%, which will provide a greater benefit than the current
Video Games Tax Relief. The expenditure credit model will also provide businesses
with greater clarity about the amount of credit they can expect to receive and greater
flexibility over production decisions. In addition, this reform will ensure video
games tax relief continues to work as intended following the implementation of the
OECD ‘Pillar 2’ rules in the UK and elsewhere.</p><p> </p><p>VGEC will be modelled
after the R&D Expenditure Credit (RDEC). The credit will be liable to Corporation
Tax, like RDEC, and this was taken into account when the credit rate was set at 34%.</p><p>
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