[ Film Tax Incentive · UK 2024+ ]
The UK's Audio-Visual Expenditure Credit (AVEC) and the new Independent Film Tax Credit (IFTC) make Britain one of the most generous and stable filming jurisdictions in the world. INDO-UK structures claims directly through the BFI and HMRC.
34%
≈ 25.5% net
AVEC — Standard
Audio-Visual Expenditure Credit for film, high-end TV and video games on qualifying UK core expenditure.
53%
≈ 39.75% net
Enhanced AVEC (IFTC)
Independent Film Tax Credit for British films with total core expenditure up to £23.5m. Principal photography on/after 1 April 2024.
39%
≈ 29.25% net
Animation & Children's TV
Higher AVEC rate for British animation (film & TV) and children's television programmes.
VFX
from 1 Jan 2025
VFX Credit
Additional credit on qualifying UK VFX spend for films and HETV claiming standard 34% AVEC. Administered by HMRC.
34%
AVEC headline rate
Taxable credit on qualifying UK spend
80%
Spend cap
Of total core expenditure eligible
10%
Minimum UK spend
Required to qualify
£0
Budget cap
No upper limit on standard AVEC claims
[ At a glance ]
| Production type | Headline credit | Net equivalent | Notes |
|---|---|---|---|
| Film, HETV, video games (AVEC standard) | 34% | 25.5% | On qualifying UK spend, capped at 80% of core. |
| Lower-budget film (Enhanced AVEC / IFTC) | 53% | 39.75% | First £15m of core; budgets ≤ £23.5m; PP ≥ 1 Apr 2024. |
| Animation film & TV | 39% | 29.25% | British animation via Cultural Test or co-production. |
| Children's TV | 39% | 29.25% | Target audience under 15. |
| VFX uplift (Film & HETV) | Additional | from 1 Jan 2025 | Standard AVEC only — IFTC excluded. |
Source: BFI & HMRC, Creative Industries Expenditure Credits, 2024–2025. Net rates assume corporation tax at 25%.
The historic film, high-end TV, animation and children's TV reliefs were reformed into the Audio-Visual Expenditure Credit (AVEC) on 1 January 2024. Video Games Tax Relief became the Video Games Expenditure Credit (VGEC). Productions can claim under the new credits now; from 1 April 2025 all new productions must claim under AVEC/VGEC, and all productions must transition by 1 April 2027 when the legacy reliefs end.
Enhanced AVEC for lower-budget British films. Pays a 53% taxable credit (≈39.75% net) on the first £15m of total core expenditure. Films with budgets up to £23.5m qualify provided the lead director or lead writer is a British citizen / UK resident, or the film is an official co-production. Principal photography must have started on or after 1 April 2024. Claims open from 1 April 2025.
AVEC is claimed by the Film Production Company (FPC) responsible for principal photography, post-production and completion. The FPC must be within the UK Corporation Tax net. There is no requirement for the FPC to own the film rights at completion, which makes the structure flexible for international financiers and co-producers.
At least 10% of core expenditure must be UK qualifying spend. The credit is calculated on the lower of (a) 80% of total core expenditure or (b) actual UK core expenditure. Even if 100% of the budget is spent in the UK, only 80% is eligible — but there is no overall budget cap on standard AVEC.
HMRC defines UK qualifying expenditure as goods or services 'used or consumed' in the UK during pre-production, principal photography, animation shooting, design and post-production — irrespective of the supplier's nationality. Spend used or consumed outside the UK does not qualify, regardless of where the invoice was raised.
A film qualifies via the BFI Cultural Test or as an official co-production under one of the UK's bilateral treaties (administered by the BFI). The Cultural Test also unlocks AVEC for high-end TV, animation, children's programmes and the VGEC for video games. Films must be intended for theatrical release; HETV must be intended for broadcast (including internet).
AVEC for HETV requires the programme to be a drama, comedy or documentary, with average core expenditure of at least £1m per slot hour and slot length over 20 minutes. Claimed via the HETV cultural test or treaty co-production by a UK television production company.
From 1 January 2025, films and HETV productions claiming the standard 34% AVEC can also claim an additional VFX Credit on qualifying UK VFX spend. The VFX uplift is not available to projects claiming Enhanced AVEC (IFTC). HMRC administers the credit directly outside the BFI Certification Unit.
[ Official references ]
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