TL;DR
These are some game-changing tax incentives available for startups:
- Video Games Tax Relief (VGTR): Reclaim up to 20% of production costs.
- R&D Tax Credits: Slash tax liability for innovative activities.
- Enterprise Investment Scheme (EIS): Attract investors and fuel growth with tax relief.
There are also tax deductions that you can make use of:
- Capital Allowances: Deduct costs of gaming equipment for a significant impact.
- Staff Training Deductions: Boost team skills while reducing tax burden.
- Marketing Expenses: Deduct promotional costs for strategic financial planning.
At Henderson Loggie, our Video Game Developers sector team understand that diving into the gaming industry is an exciting journey filled with passion and innovation. While game development, design, and storytelling steal the spotlight, let’s not forget about the less glamorous – yet vital – aspect of running a successful gaming startup: managing your accounts and navigating the tax landscape.
Sure, talking about accounts and taxes might not be as thrilling as discussing the latest game releases or groundbreaking technologies, but it’s an essential part of the entrepreneurial journey. The right financial strategy can be a game-changer for your startup influencing its trajectory and ultimate success.
Tax Incentives: Boosting Your Game
Starting a gaming business isn’t all fun and games when it comes to finances. Fortunately, the UK government offers various tax incentives to lighten the financial load for startups in the gaming industry.
1. Video Games Tax Relief (VGTR)
VGTR is the unsung hero of the gaming industry. This incentive allows game developers to claim back up to 20% of their production costs for qualifying games, and for small and medium-sized enterprises (SMEs), this can be a game-changer. At Henderson Loggie, our team is well-versed in navigating the VGTR landscape, ensuring that you make the most of the relief and focus on what you do best – creating incredible games. You can read our full article on VGTR for more information.
2. Research and Development (R&D) Tax Credits
Innovation is at the core of the gaming industry, and the government acknowledges this by providing tax credits for eligible R&D activities. Whether you’re working on cutting-edge graphics, advanced artificial intelligence, or pushing the boundaries of your game engine, R&D tax credits can significantly reduce your tax liability.
3. Enterprise Investment Scheme (EIS)
Funding is a critical aspect of any startup, and the EIS is a beacon of support for investors looking to back your gaming venture. By offering tax relief to individuals investing in your company, the EIS can attract potential backers and fuel your growth. Our tax team understands the intricate details of EIS and can guide you through the process seamlessly.

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Deductions: Power-Ups for Your Finances
While incentives provide financial boosts, deductions act as power-ups, minimising your taxable income and maximising your retained earnings.
1. Capital Allowances for Equipment
Investing in cutting-edge gaming equipment? Make sure to leverage capital allowances to deduct the cost of qualifying assets from your taxable profits. From high-performance computers to VR headsets, these deductions can significantly impact your bottom line.
2. Staff Training Costs
The gaming landscape evolves rapidly, and so should your team’s skills. Deducting staff training costs not only enhances your workforce’s capabilities but also reduces your tax burden. Keep your team ahead of the curve without breaking the bank.
3. Marketing and Promotion Expenses
Building a buzz around your game is essential for success. Lucky for you, marketing and promotion expenses are deductible. Whether it’s hosting a launch party or running targeted online ads, these costs can be a strategic part of your financial plan.
Conclusion
While accounting and tax may not be the most exciting aspects of your gaming startup, they are the foundation upon which success is built. At Henderson Loggie, our Games & Digital team is committed to guiding you through the financial maze, ensuring you reap the benefits of available tax incentives and deductions.
Let’s level up together – turning your passion for gaming into a thriving and financially sound business. Ready to embark on this exciting journey? Get in touch with us today to arrange a free 30-minute video call to see how we can help with your startup.