Audio-Visual Expenditure Credit (AVEC)

Audio-Visual Expenditure Credit (AVEC)

Provides the Audio Visual Expenditure Credit for United Kingdom qualifying film, television, animation, and children's productions.

The Audio-Visual Expenditure Credit (AVEC) is an above-the-line expenditure credit administered by HM Revenue and Customs (HMRC), replacing the previous Film Tax Relief, High-End Television Tax Relief, Animation Tax Relief, and Children's Television Tax Relief from 1 April 2025. AVEC applies to UK-qualifying film, high-end television (HETV), animation, children's television, and — from April 2024 — independent film productions. Credit rates are: 34% for film and HETV; 39% for animation and children's TV; 53% under the Independent Film Tax Credit (IFTC) for qualifying independent films with total production budgets of £15 million or less.

Eligibility requires the production company to be UK-registered, to pass the BFI Cultural Test (or qualify under an approved co-production treaty), and to spend at least 10% of total core expenditure in the UK. The credit is capped at 80% of total core expenditure or actual UK core expenditure, whichever is lower. AVEC is an "above-the-line" credit — it is recognised as taxable income in the company's profit and loss account before the tax line, mirroring the RDEC architecture. Claims are filed through the Corporation Tax return (CT600), supported by BFI interim or final certification, which must be obtained before any credit can be claimed.

AVEC became mandatory for all new productions from 1 April 2025. Productions that commenced principal photography before that date may continue under the legacy reliefs until the final sunset date of 31 March 2027, after which all old-regime Film Tax Relief and related claims close permanently.