The UK’s film and TV tax relief system has undergone a major transformation with the introduction of the Audio-Visual Expenditure Credit (AVEC). This scheme, which came into effect on 1 January 2024 and for which applications are now beginning, replaces the previous tax reliefs for film, high-end TV, animation, and children’s TV.
So, what does this mean for the industry? We’ve already discussed what the Enhanced AVEC (also known as the ‘Indie Film Credit’) looks like, but it’s not only small budget productions that can avail of the new scheme.
Key Benefits of AVEC
• Higher Credit Rates: AVEC offers a 34% tax credit on qualifying expenditure for film and high-end TV, and 39% for animation and children’s TV.
• More Transparent & Predictable: The AVEC is an above-the-line expenditure credit, meaning it provides greater visibility and immediate financial benefit to productions. This also means the relief is taxable.
• Applies to Core UK Expenditure: The scheme covers costs directly used or consumed in the UK, with a cap at 80% of total core expenditure.
• Simplified Transition: Productions can opt into AVEC now, but those already underway before 1 April 2025 can choose to continue applying under the old system until 31 March 2027.
Who Qualifies?
To be eligible, productions must:
• Pass the British cultural test or qualify as an official co-production.
• Have at least 10% of core expenditure in the UK.
• Be intended for theatrical release, stream, or broadcast (for film) or meet the high-end TV qualification criteria (e.g., £1M per hour minimum spend for TV productions).
Wondering which AVEC stream your new tv or film production will qualify for? Trying to figure out how it differs from the previous tax relief HMRC has offered?
What Next for Productions?
The AVEC aims to enhance the UK’s competitive edge in global content production. With a clear structure and improved cash flow benefits, it’s designed to make the UK an even more attractive hub for film and TV projects.
What are your thoughts on the new scheme? Will AVEC help streamline tax relief for your productions?
If you’re planning a production and want to understand how to maximise your tax relief under AVEC, now’s the time to review your eligibility and claim strategy. Reach out to Gray Burke-Stowe to see if you might be able to claim under the AVEC scheme and help your budget go further.
Contact our team and discover how we can support your business