Audio Visual Expenditure Credits for Corporation Tax

If a company operates within the creative industries and has incurred expenditure on films, high-end TV programmes, children’s TV programmes, or animations from 1 January 2024 onwards, it may qualify for corporation tax relief under the Audio Visual Expenditure Credits (AVEC) scheme.

Claimable Amount

Companies can claim expenditure credits based on a percentage of their qualifying expenditures. Qualifying expenditures are the lower of:

• 80% of total core costs, or

• The amount of UK core costs.

  
  

The AVEC scheme offers two rates, depending on the type of production. Children’s TV programmes and animations benefit from a higher rate compared to other films and TV programmes. Production companies can claim the following expenditure credit rates:

• 39% of qualifying expenditure for children’s TV programmes, animated films, and animated TV programmes.

• 34% of qualifying expenditure for all other films and TV programmes.

  
  

Core Costs

To qualify for AVEC, the company must be responsible for engaging, planning, and decision-making, as well as directly negotiating and paying for rights, goods, and services. Core costs for relief purposes include:

• Pre-production costs

• Principal photography

• Post-production costs

• Delivery of the completed film or programme

  
  

Conditions for making a Claim

Films

A film qualifies for AVEC if it meets the following conditions:

• Certified as British by the British Film Institute (BFI).

• Intended for theatrical release.

• At least 10% of its core costs are related to activities in the UK.

A film is considered an animation if at least 51% of the core costs are spent on animation.

TV Programmes

A TV programme qualifies for AVEC if it meets the following criteria:

• Certified as British by the British Film Institute (BFI).

• Intended for broadcast to the general public, including online streaming.

• At least 10% of its core costs relate to activities in the UK.

• The programme is a drama, comedy, documentary, animation, or children’s programme.

  
  

A TV programme is classified as a children’s programme if the primary audience is expected to be under the age of 15. It is considered animation if at least 51% of the core costs are spent on animation.

For dramas, comedies, and documentaries, additional conditions apply:

• The average core expenditure per hour of slot length must be at least £1 million (pro-rata).

• The slot length must exceed 20 minutes per episode.

Speak to an Expert

Audio Visual Expenditure Credits present a lucrative opportunity for UK-based companies in the creative industries, offering substantial tax savings. If you are involved in film or TV production and would like to explore how AVEC can benefit your business, please get in touch with us. Our team of experts will be delighted to assist you.

Authored by: London Tax Team