Make An Enquiry
Get in touch

0121-633-2000

enquiries@friendpartnership.com

Logo of Friend Partnership

Audio-Visual Expenditure Credits

A camera is sitting on a tripod on a table.

What is the Audio-Visual Expenditure Credit (AVEC)?


The AVEC is a government initiative designed to support companies engaged in the production of high-quality audio-visual content, such as:

  • Feature Films
  • Television Programs
  • Documentaries
  • Animation Projects
  • Interactive Media


This credit replaces the previously available tax reliefs:


Like previous relief schemes, you have up to two years after a company’s accounting year end to make, amend, or withdraw a AVEC claim.


Eligibility Criteria


To qualify for the AVEC, your business must meet specific requirements, including.


  • British Certification: Your project must have British Certification to be able to make a claim. This requires passing the British Film Institute’s cultural test. An interim certificate will be issued for incomplete work, with a final certificate being issues when the production has finished.
  • Production Company: You must be a UK-incorporated company or a qualifying entity responsible for the audio-visual production.
  • Production Activities: At least 10% of your project’s core expenditure must be incurred within the UK.

In addition to the above criteria, each production type has its own additional criteria.


Audio-Visual Expenditure Credit for Film


The film must satisfy one of the following:

  • The lead director is a British citizen or a UK resident
  • The lead writer is a British citizen or UK resident
  • The film qualifies as an official co-production


Core expenditure determines the rate of AVEC

  • If the total core expenditure does not exceed £23.5 million, enhanced AVEC can be claimed on the first £15 million
  • If the total core expenditure exceeds £23.5 million, only standard AVEC can be claimed


Audio-Visual Expenditure Credit for High-end Television


  • The program must be intended for broadcast, including via the internet.
  • Be a drama, comedy, or documentary (excluding programme types apply).
  • Average core expenditure per hour of slot length is at least £1 million (pro rata).
  • Have a slot length of more than 20 minutes.


Audio-Visual Expenditure Credit for Animation


  • The program must be intended for broadcast, including via the internet.
  • Allocate at least 51% of core expenditure to animation production activity.
  • Must not fall under a category of excluded programmes.


Audio-Visual Expenditure Credit for Children’s Television


  • The program must be intended for broadcast, including via the internet.
  • Be primarily aimed at viewers under the age of 15.
  • Must not fall under the category of excluded programmes
A little girl is sitting on a wicker ottoman watching a television.
A jar full of British coins
What You Can Claim


You may be eligible for an expenditure credit calculated as a percentage of your qualifying costs. Qualifying costs are determined as the lower of:


  • 80% of your total core expenditure, or
  • Your total UK core expenditure.


The rates for expenditure credit are as follows:


  • For enhanced AVEC a 39% above the line credit applies
  • For standard AVEC a 34%  above the lined credit applies


Taxation and Use of Expenditure Credits


The total expenditure credits for your company during a period are subject to taxation at the main Corporation Tax rate.


Credits are first applied to reduce your Corporation Tax liability. If additional tax liabilities exist, credits can be used to settle those as well. Alternatively, they may be surrendered to other group companies.


Any remaining credit after these steps will be issued to you as a payable credit.

How We Can Help


At Friend Partnership, we offer comprehensive support tailored to the needs of production companies, helping you navigate the complexities of AVEC. Our services include:


  • Eligibility Assessment:  Our team will evaluate your project against AVEC criteria to ensure it qualifies for the credit, minimising the risk of claims being rejected.
  • Application Support:  We’ll assist you in completing and submitting all necessary paperwork, including the cultural test application and AVEC claim forms, ensuring accuracy and compliance.
  • Financial Analysis:  Our experts will help identify qualifying expenses and optimise your claim, maximising the value of the credit for your business.
  • HMRC Liaison:  We act as your representatives with HMRC, handling any queries or audits related to your AVEC claim with efficiency and professionalism.


Why Choose Us?


  • Specialised Expertise: Our accountants have years of experience working within the creative industry.
  • Tailored Solutions: We understand that every project is unique, and we adapt our approach to meet your specific needs.
  • Proven Track Record: We have successfully helped numerous productions, enabling them to reinvest in future projects.
A man and a woman are sitting in a theatre holding buckets of popcorn.

Get Started Today


Navigating AVEC doesn’t have to be a daunting process. Friend Partnership will guide you every step of the way. Contact us today to schedule a no obligation consultation with one of our creative industry tax team members and discover how we can help your business navigate the Audio-Visual Expenditure Credit.

Make An Audio-Visual Expenditure Credit Enquiry

KNOWLEDGE BASE

A row of houses next to a body of water with boats docked in front of them.

Pre-Owned Asset Tax: Understanding Its Role in Inheritance Tax Planning

7 February 2025
Introduced in 2005, pre-owned asset tax applies to assets previously owned by an individual but now used or enjoyed by them under certain conditions.
A bunch of dice with icons on them on a white surface.

Reducing Employer National Insurance Costs - Offering Benefits-in-Kind and Salary Sacrifice

27 January 2025
Implementing a salary sacrifice scheme can provide employers with substantial advantages, both financially and in terms of employee satisfaction

OTHER SERVICES WE PROVIDE

Share by: