What is the Audio-Visual Expenditure Credit?
AVEC is a taxable Corporation Tax expenditure credit available to qualifying UK film and television production companies. It is calculated by reference to qualifying core expenditure on a certified production, rather than on a company’s general trading results. Because the credit is taxable and then passes through a statutory redemption sequence, the headline percentage is not the same thing as the amount a company ultimately receives. AVEC replaced the previous audiovisual tax-relief structure for qualifying productions under the transition rules.
Who can claim AVEC?
The claimant is normally the qualifying production company for the production. That is generally the company actively engaged in planning and decision-making and directly responsible for pre-production, principal photography or production, post-production, and completion and delivery, including negotiating, contracting and paying for the relevant rights, goods and services. Commissioners, broadcasters, distributors, financiers and passive special-purpose companies do not automatically qualify simply because they are connected with a production. The position must be assessed on the facts and subject to the statutory conditions.
Which film and television productions can qualify?
Broadly, film, high-end television, animation and children’s television productions can qualify where the statutory conditions are met. Film normally needs to be intended for theatrical release; high-end television normally needs eligible drama, comedy or documentary programming intended for broadcast or qualifying public streaming, with average qualifying core expenditure of at least £1 million per hour and a slot length greater than 20 minutes per episode; children’s television must be primarily intended for an audience under 15. British certification or qualification as an official co-production is normally required, alongside the UK core-expenditure conditions. Not every animation, online video, advertisement or children’s programme qualifies.
Is BFI certification required for AVEC?
Qualifying productions normally require an interim or final British certificate, or qualification as an official co-production where that route applies. An interim certificate is generally used while the production is in progress and a final certificate after completion. Certification is decided by the BFI on its own criteria and is separate from the Corporation Tax claim, so a production should not assume the tax position is settled before the certification position is clear.
What expenditure can qualify for AVEC?
Core expenditure generally concerns pre-production, principal photography or production, and post-production. The expenditure must relate to the qualifying production activity and be supported by appropriate accounting records. Development, financing, distribution, marketing and other non-production costs may require separate treatment and should not automatically be included in a claim. HMRC publishes guidance on non-qualifying expenditure, and the statutory position should be checked against the specific cost categories in the production ledger.
How does the 80% expenditure restriction work?
For a standard AVEC claim, qualifying expenditure is generally the lower of 80% of total qualifying core expenditure and the qualifying core expenditure relating to UK activities. In practice this means a production with a high proportion of UK spend is usually capped at 80% of core expenditure, while a production with a lower proportion of UK spend is limited by its actual UK figure. Special rules can apply to qualifying UK visual-effects expenditure, which can fall outside the ordinary restriction, and those rules require separate review.
What are the standard AVEC rates?
The standard headline rates are 34% for most qualifying film and high-end television expenditure and 39% for qualifying animation and children’s television expenditure. Separate enhanced rules can apply to qualifying independent films, where a 53% headline rate may be available, and to qualifying UK visual-effects expenditure. Those enhanced routes carry their own conditions and are not covered in detail on this page.
Is the headline AVEC rate the amount paid to the company?
No. The headline percentage is applied to qualifying expenditure to calculate the credit, but the credit is taxable and then passes through the statutory redemption steps. Those steps can apply the credit against current-period Corporation Tax, a notional tax restriction, earlier Corporation Tax liabilities where applicable and other relevant HMRC liabilities, with group surrender possible where permitted. Only any remaining balance is payable. The amount received therefore depends on the company’s wider tax position and cannot be assumed from the headline rate.
How long does a company have to make an AVEC claim?
Claims are generally subject to a deadline of two years after the end of the relevant period of account. That is a backstop rather than a plan: eligibility, certification and record quality are far easier to address while the production is live or recently completed. Leaving the review until close to the deadline can make it difficult to obtain certification evidence, analyse UK and non-UK expenditure properly, or correct accounting records.
What are the additional information form and CT600P?
The additional information form provides HMRC with the supporting detail for a creative-industry claim and must be submitted on or before the Company Tax Return carrying the claim. CT600P is the Corporation Tax supplementary page for creative-industry claims and applies to relevant Company Tax Returns submitted on or after 6 April 2026. Both must be consistent with the computation and the Company Tax Return itself; completing a form alone does not create a valid claim.
What records should a production company retain?
Typically production budgets and cost reports, general ledger and nominal-code detail, supplier invoices, contracts and purchase orders, payroll and freelancer records, UK and non-UK expenditure analysis, connected-party expenditure records, the apportionment methodology used, certification documents, evidence of intended theatrical release or broadcast, production schedules, and a reconciliation to the statutory accounts and Corporation Tax return. Holding these documents supports a claim but does not by itself establish that a production qualifies.
