Most studios that come to us for a tax credit advance have the same shape of problem: the game is eighteen months from release, the burn is real, and the credit that would fund a good part of the next year cannot be claimed until the accounting period closes. A lender can close that gap, but only against a claim that exists — and at the time of writing, no claim exists without an interim BFI certificate. This post is for UK studio founders and finance leads who want to know what the certificate is, how long it takes, why it gets delayed, and what a lender does with it once it lands.
What the interim BFI certificate actually is
Both the Video Games Expenditure Credit (VGEC) and, for existing games, VGTR require the game to be certified as British. The certification is done through the BFI Certification Unit on behalf of DCMS, using the cultural test for video games. Two certificates are issued for each game:
- The interim certificate, issued before the game is complete, on the basis of what the studio expects the finished game to be. This is what lets you claim during development.
- The final certificate, issued after completion, confirming that the finished game passed.
From a lender's point of view the interim certificate is the document that turns "we think we will get a credit" into "there is a receivable from HMRC that we can take security over". It is not a formality. Without it, a lender is pricing hope, and hope is priced like a bridge — not like a tax credit advance.
The BFI cultural test for video games, step by step
The cultural test is points-based. A game needs 16 of the 31 available points to pass. The points are spread across four areas: cultural content (where the game is set, its characters, its subject matter and the language it is written in), cultural contribution (British creativity, heritage or diversity), cultural hubs (where the development work is carried out) and cultural practitioners (the nationality or residence of the people making it). Most UK-developed games with a UK team pass on hubs and practitioners alone, and the content section is where borderline cases are decided.
The process in practice:
- Prepare the application. The studio, or its accountant or adviser, completes the BFI application with the game's design document, narrative summary, team details and a statutory declaration.
- Assemble the evidence. Each point claimed needs evidence: script or narrative extracts for content, payroll or contracts for practitioners, location details for hubs. This is the stage most applications underestimate.
- Submit and respond. The Certification Unit reviews the application and comes back with questions where evidence is thin. Each round of questions adds time.
- Certificate issued. The interim certificate names the game and the applicant company. It is then used to support the claim in the corporation tax return.
How long it takes, and why it takes longer
Processing takes weeks, not days. A clean, well-evidenced application can come through in a few weeks; a thin one can take months as it cycles through requests for more information. In our experience since 2018, the common reasons for delay are:
- Incomplete cultural test evidence. By far the most frequent cause. Points claimed for content without the narrative material to back them, or practitioner points claimed for contractors whose residence is not documented.
- The wrong applicant company. The certificate must be in the name of the company that will make the claim — the video games development company for tax purposes. Group structures with a holdco and a studio subsidiary trip up here.
- A game that changed. If the scope, setting or team has moved on since the design document was written, the application and the game no longer match.
- Applying too late. A studio that starts the application a month before it wants to borrow has already lost the timing battle.
What the accountant's letter must confirm
The certificate proves the game is British. It says nothing about how much the claim is worth. That comes from an accountant's letter, and for a lender it is the second half of the file. A useful letter, from the firm that will prepare the return, confirms:
- The company qualifies as the video games development company for the game named on the certificate.
- The accounting period the claim relates to, and whether it falls under VGEC or, for an existing game, VGTR — the sizing is different, as we explain in our post on the VGTR to VGEC transition.
- The expected qualifying UK core expenditure for the period, after the 80% cap and the £1m subcontracting cap.
- The expected credit, stated net of the 25% tax on a VGEC credit — roughly 25.5% of the qualifying amount rather than the 34% headline.
- The expected filing date and, if known, the likely HMRC payment window.
A letter that hedges on eligibility, or gives a very wide range, tells us the claim has not been thought through yet — a reason to finish the thinking before borrowing.
The lender's checklist for an interim certificate VGEC advance
What we need to fund a claim, in order of how often it holds things up:
- The interim BFI certificate for the game, in the name of the claimant company.
- The accountant's letter, as above.
- The production budget, split into core expenditure and everything else, with UK and non-UK spend shown separately.
- A monthly cash-flow forecast from now until the expected HMRC payment, showing what the advance is for and how the studio gets to that date.
- Latest management accounts and last filed accounts.
- Company structure and cap table, so security — a debenture and specific security over the HMRC receivable — sits on the right entity.
- Prior claim history. A studio that has had VGTR claims paid without enquiry is a better credit than a first-time claimant, and is priced accordingly.
With all of that in hand, our VGTR and VGEC loan facility can advance up to 80% of the expected credit and draw down in as little as a week. Pricing for a clean claim is typically in the teens per annum, with no warrants, no equity and no personal guarantees as standard.
Two studios each expect £250k of net VGEC credit on £1m of qualifying UK core spend, and each wants to draw an advance in May. Studio A applied for its interim certificate in January with a complete evidence pack, received it in March, and had its accountant's letter ready in April. It draws £200k — 80% of the expected credit — in the first week of May. Studio B started its application in April, received two rounds of questions about content evidence, and got the certificate in July. In the meantime it covered May and June by deferring salaries and taking a short, more expensive bridge. Same credit, four months and real money between them. All figures are rounded and illustrative.
Start the conversation before the certificate lands
The mistake we see most is treating the certificate as the trigger for talking to a lender. It should be the last document in the file, not the first phone call. A studio can send us the budget, cash-flow forecast, accounts and structure while the BFI application is in progress. We underwrite everything else in parallel, agree terms subject to the certificate and the letter, and fund once they arrive. That turns a four-to-six-week process into a one-week drawdown when the certificate is issued.
| Wait for the certificate, then approach a lender | Approach a lender while the application is in | |
|---|---|---|
| Underwriting | Starts after the certificate | Runs in parallel with the BFI |
| Time from certificate to cash | Several weeks | About a week |
| Cost of the gap | Deferrals, bridge pricing, or dilution | Nothing beyond the advance itself |
| Risk of surprises | Higher — eligibility issues found late | Lower — both sides see them early |
It also means we can tell you early if a tax credit advance is not the right answer — a claim under £125k, a cultural test that looks marginal, or a gap that is really a publisher or funding-round problem rather than an HMRC timing problem. If a bank will lend on workable terms, take it. If not, the earlier the conversation, the cheaper the money.
If your BFI application is in, or about to go in, send us the budget and cash-flow forecast now. We will underwrite in parallel so the money is ready the week the certificate is.
Frequently asked questions
Can a lender advance against a VGEC claim before the interim BFI certificate is issued?
Not as a tax credit advance. Until the certificate exists there is no claim and therefore no HMRC receivable to secure against. What a lender can do is underwrite everything else in parallel, agree terms subject to the certificate and the accountant's letter, and fund within about a week of issue. If cash is needed before then, that is a bridge secured on something else, priced as a bridge.
How long does the interim BFI certificate take?
Weeks, not days. A complete, well-evidenced application can come through in a few weeks; one that draws repeated requests for more cultural test evidence can take months. The single biggest determinant is whether every point claimed has documentation attached at submission. Starting the application a month before you want to borrow is usually too late.
What is the pass mark for the BFI cultural test for video games?
At the time of writing a game needs 16 of the 31 available points. Points are awarded across cultural content, cultural contribution, cultural hubs and cultural practitioners. Most games developed in the UK by a UK-based team score well on hubs and practitioners, so the content section tends to decide borderline cases. Your adviser or the BFI's guidance sets out the detail.
Does the interim certificate need to be renewed if the game changes?
The interim certificate is issued on the basis of what the finished game is expected to be. If the scope, setting or team changes materially, speak to your adviser about whether the application needs updating, because the final certificate is issued against the finished game. From a lending point of view, a game that no longer matches its application is a risk we would want explained before drawdown.
What else does a lender need besides the certificate?
An accountant's letter confirming the expected net credit and the accounting period; a budget with core, UK and subcontracted spend shown separately; a monthly cash-flow forecast to the expected HMRC payment date; management and filed accounts; and the company structure so security goes on the right entity. Prior claims paid without enquiry help the pricing. With that in place we can draw down in as little as a week.