FPC60026 - Additional Information Form - section 5: production details (AVEC)

Note that this section does not apply to claims to Film Tax Relief – see section 4 instead (FPC60024).

Sections 4-6 will unlock depending on which reliefs or credits were chosen in section 3.

Section 5 is required for claims to the Audio-Visual Expenditure Credit (AVEC) or the Video Games Expenditure Credit (VGEC). If the company is making a claim for any of the other audio-visual tax reliefs, or any of the cultural tax reliefs, then they may also need to complete sections 4 or 6.

AVEC and VGEC projects – information about specific productions

For each individual production being claimed, the following information must be provided. The form will cycle through these questions in a loop until every production has been entered.

  • Production name

This should be the current name of the film, programme, or video game. Where this name is different than the one on the supplied British cultural certificate, this must be indicated and an explanation given e.g. the original title was just a working title; an official title was changed on X date. If the production is known by different names in different territories, it would be useful to add that here. The explanation does not need to go into specific commercial reasons, but needs to be thorough enough that HMRC is satisfied that the certificate matches the production being claimed for. 

  • British cultural certificate and reference number

A digital version of the certificate, as obtained from the BFI (British Film Institute), must be uploaded as an attachment. The DCMS reference number from this certificate also needs to be manually entered. A certificate must be included for each production claiming, for each period. Even if a company is using the exact same certificate that was submitted to HMRC previously, the certificate must be uploaded again every time it is to be used in a claim.

All certificates must be in date at the time the claim is submitted. If the production status is complete, then a final certificate must be provided.

  • Start date of pre-production

This is the date on which the film or programme began pre-production, or the video game began active development. This should be the date at which point the production has been given the green light to go ahead. It does not include any early period where speculative work is being undertaken and a decision is still to be made as to whether or not the production will go ahead.

  • Production status

This is the status of the production at the end date of the accounting period covered by the form, and should not reference any progress made after this date. There are three options:
- ongoing (where the production is still in development but is not yet complete)
- complete
- abandoned

If the production has been abandoned, the date of abandonment should be inputted.

  • Details of connected party transactions

Expenditure incurred on connected party transactions will only qualify for credit if the transactions are disclosed to HMRC. The only way to disclose such transactions is by completing this step of the additional information form, for the accounting period in which that expenditure has been brought into account.

Payments to connected parties must be made in accordance with the arm’s length principle.

The applicant must set out the number of different connected persons with whom the company has made transactions with during the period, and the total value of all the connected party transactions in the period. They must then attach a document that lists out the following information for each transaction:

Name of connected party
Date of transaction
Amount of expenditure
Description of goods/services provided

Please read our guidance on the connected party transaction rules for more information.

AVEC and VGEC expenditure reporting - information about each credit category

After completing specific questions for every individual production, this sub-section then asks for totals for each type of relief or credit being claimed. This means that if the company is claiming for multiple productions in the same category, the company must add up the figures for all those productions to arrive at the amounts required by the form.

For example, if a company is claiming the Audio-Visual Expenditure Credit (AVEC) on three TV programmes (two children’s and one animated), and also Animation Tax Relief (ATR) on one programme, then they should be completing this AVEC sub-section twice: once for the children’s programmes, and once for the animated programme. They also need to complete the calculation sub-section in section 4 to report the data for their ATR claim.  When they come to this part for AVEC (children’s TV), they should be adding together the expenditure and credit amounts from both the children’s TV programmes.

For a claim to Video Games Expenditure Credit (VGEC), and for each category of AVEC being claimed, the following are required:

  • Upload calculations

This is an opportunity for companies to upload the remaining mandatory supporting evidence:
- a computation showing how the amount of credit has been calculated for each production
- a breakdown of production expenditure for each production

HMRC has produced templates which companies can complete and submit to help them with this requirement. These templates can be downloaded through the form itself, or obtained via emailing creative.industries@hmrc.gov.uk.

  • Total expenditure for the period

The total expenditure for the period is the amount of costs that have been brought into account for the period when calculating the profits of the trade (s1179BB). It will include both core and non-core costs, and both UK and non-UK expenditure. It is the amount given by either s1179BB(2)(a) or s1179BB(3)(a), depending on whether this is the first period of account for the trade. It is given by box CP7 on the HMRC template for each individual production.

The applicant should calculate this amount for all productions claiming under the expenditure credit category and add them together to give a combined total.

  • Total UK core expenditure for the period

This box requires the amount of relevant production expenditure brought into account for the period that is also UK expenditure. This is expenditure where all the following applies:

  • It is ‘core expenditure’ as per s1179DS or s1179FK
  • It is not ‘excluded expenditure’ as per s1179DT, s1179DU, s1179FL, or s1179FM. This applies where expenditure would also qualify for a Research and Development relief or credit, or it is connected party profit not at arm’s length.
  • It is on goods or services used or consumed in the UK (s1179AB(1)).

A breakdown between core and non-core expenditure, and also between UK and non-UK expenditure, should be attached at a later point on the form. The HMRC expenditure breakdown template can assist companies in producing this breakdown.

The amount of UK core expenditure for the period, for each individual production, is given by box CP10 on the HMRC template.

The applicant should work out this amount for all productions claiming under the expenditure credit category and add them together to give a combined total.

  • Total core expenditure for the period

This should be the amount of relevant production expenditure brought into account for the period. It includes both UK and non-UK expenditure. Core expenditure is:

  • Expenditure on the pre-production, principal photography, or post-production of a film or programme (s1179DS).
  • Expenditure on designing, producing or testing a video game, but not designing the initial concept, nor debugging nor carrying out maintenance in connection with a completed video game (s1179FK).

Any amounts of excluded expenditure should not be included:

  • Expenditure in respect of which the company could claim a Research and Development (R&D) relief or credit (s1179DT and s1179FL)
  • Connected party profit (unless the transaction is at arm’s length) (s1179DU and s1179FM)

This amount for each individual production is on the HMRC template in box CP3.

The applicant should work out this amount for all productions claiming under the expenditure credit category and add them together to give a combined total.

  • Qualifying expenditure for the period

This is the amount remaining following the application of Step 4 of the amount of expenditure credit calculation (s1179CA). Under the previous reliefs for films, TV and video games, this would have been the amount given by the additional deduction calculation. It is calculated by determining the qualifying expenditure to date, and then subtracting the amount of qualifying expenditure for previous periods in respect of which an expenditure credit has already been claimed.

The qualifying expenditure to date is the lesser of:

  • the UK expenditure incurred to date, or
  • 80% of the total core expenditure (less any excluded amounts)

Qualifying expenditure for the period for each individual production is given by QE9 in the HMRC template.

The applicant should work out this amount for all productions claiming under the expenditure credit category and add them together to give a combined total.

  • Amount of audio-visual expenditure credit for the period

This is the amount of credit to which the company is entitled to under this category for the period. It is the amount given by Step 5 of the amount of expenditure credit calculation (s1179CA). It is determined by multiplying the qualifying expenditure for the period (Step 4) by the appropriate credit rate. It is not the amount payable to the company, nor the amount of credit remaining after carrying out the credit redemption steps in s1179CC. It is the amount which should be added to the company’s taxable income.

The rates of expenditure credits are:

AVEC – Films, High-end TV programmes: 34%
AVEC – Children’s TV programmes, Animated films and TV programmes: 39%
VGEC: 34%

This applicant should work out this amount for all productions claiming under this expenditure credit category and add them together to give a combined total. If the applicant is using the HMRC template, the amounts in box EC2 should be added together.