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The UK’s new Audio Visual Expenditure Credit

The UK’s new Audio Visual Expenditure Credit

The UK’s new Audio Visual Expenditure Credit (AVEC)
Crew on location in Fife

In January 2024, the UK Government introduced a new Audio Visual Expenditure Credit (AVEC). Qualifying animated films, animated TV programmes and children’s TV programmes can access relief with a net value of 29.25%. All other qualifying features films and TV programmes can access relief with a net value of 25.5%.

Transitional rules apply to film and TV.

AVEC is available to companies with accounting periods ending on or after 1 January 2024.

If a company’s accounting period begins before 1 January 2024 but ends after 1 January 2024, it will have the option to apply existing rules on expenditure incurred up to 31 December 2023 and apply AVEC rules on expenditure incurred from 1 January 2024.

Where principal photography begins before 1 April 2025, existing rules remain available up to 31 March 2027. Existing rules will not be available to productions where principal photography commences on or after 1 April 2025.

Qualification criteria for each of the current film and TV reliefs remain unchanged within AVEC including:

UK expenditure on goods/services “used or consumed” in the UK.

Allocating expenditure between UK and non-UK remains on a “just and reasonable” basis.

TV minimum expenditure test is £1m of core expenditure per hour.

The cap of 80% remains and UK core expenditure higher than 80% of expenditure will not generate credit.

Minimum UK core expenditure threshold remains 10% of total core expenditure.