Guidance

Claim Audio-Visual Expenditure Credits for Corporation Tax

Find out if you qualify for Corporation Tax Audio-Visual Expenditure Credits and what you can claim.

From:
HM Revenue & Customs
Published
19 January 2024

If you’re a company claiming tax relief you can claim Audio-Visual Expenditure Credit (AVEC) on expenditure incurred from 1 January 2024 on:

  • film
  • high-end TV programmes
  • children’s TV programmes
  • animation

You have up to 2 years after the end of the period of account to which the claim relates, to make, amend or withdraw a claim for creative industry tax reliefs.

HMRC may agree to accept late claims in some circumstances.

Before you claim

You’ll need to have British certification before you can claim. You can read about passing the cultural test and applying for British certification on the British Film Institute website.

The British Film Institute will issue:

  • an interim certificate — for uncompleted work
  • a final certificate — when production has finished

  1. Get British certification.

  2. Find out what you can claim.

  3. Check the conditions for film, high-end TV programmes, children’s TV programmes or animation.

  4. Work out the core costs.

  5. Complete the additional information form — From 1 April 2024 all claims must include this.

  6. Claim on your Company Tax Return.

What you can claim

You can claim an expenditure credit based on a percentage of your qualifying expenditure. Qualifying expenditure will be the lower of either:

  • 80% of total core costs
  • the amount of UK core costs

You can claim the following expenditure credit rates:

  • 39% of qualifying expenditure for children’s TV programmes, animated films and animated TV programmes
  • 34% on all other films and TV programmes

You will need to work out the amount of expenditure credit:

  • due to your company
  • used to pay off your tax liabilities
  • surrendered to other companies
  • due as a payable credit

  1. Your company’s total expenditure credits for a period are taxed at the main rate of Corporation Tax.

  2. They are then used to pay off your Corporation Tax liability.

They can also be used to pay off other tax liabilities if you have them, or surrendered to other group companies.

If you have credit remaining after these steps, you will receive a payable credit for that amount.

Check the conditions to claim

Film

Your film must:

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

TV programmes

You can claim on a TV programme if:

  • it is certified as British by the British Film Institute
  • it is intended for broadcast to the general public — this includes streaming online
  • at least 10% of the ‘core costs’ relate to activities in the UK
  • the programme is a drama, comedy, documentary, animation or children’s programme

A TV programme is:

  • a children’s programme if the primary audience for the programme is expected to be under the age of 15
  • an animation if at least 51% of the ‘core costs’ are spent on animation

Dramas, comedies and documentaries

They must also:

  • have average ‘core costs’ of at least £1 million per hour of slot length
  • have a slot length in relation to the programme which is greater than 20 minutes per episode

TV programmes commissioned together are treated as one programme.

Work out core costs

Core costs are what is spent on pre-production, principal photography and post-production.

Your company must be responsible for:

  • pre-production
  • principal photography
  • post-production
  • delivery of the completed film or programme

You company must also:

  • be actively engaged in planning and decision-making
  • directly negotiate, contract and pay for rights, goods and services

What you’ll need

For each production you must provide:

  • a British cultural certificate from the British Film Institute — if the film or TV programme is still in production, you can provide an interim certificate and send the final certificate when the film or TV programme is complete — certificates must be in date when you submit them
  • statements of the amount of core costs — split between UK and non-UK costs
  • a breakdown of costs by category
  • details of connected party transactions

From 1 April 2024, all claims must be accompanied by an additional information form. This will allow you to provide the necessary evidence to support your claim.

How to claim

You must claim for relief on your Company Tax Return.

You will need to work out the amount of expenditure credit:

  • due to your company
  • used to pay off your tax liabilities
  • surrendered to other companies
  • any payable credit due

Further information

Detailed guidance on the Audio-Visual Expenditure Credit will be published soon.

Published 19 January 2024
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