Audio-Visual Expenditure Credit (AVEC) – Spring Budget 2024

The film, TV and video games tax reliefs were reformed in 2023 to expenditure credits, following the same approach as the Research and Development Expenditure Credit (RDEC).

The new Audio-Visual Expenditure Credit (AVEC) replaced the current film, high-end TV, animation and children’s TV tax reliefs. Film, high-end TV and video games are generally eligible for a credit rate of 34% and animation and children’s TV eligible for a rate of 39%.  

The additional support will be provided to independent films via the Independent Film Tax Credit (IFTC). The IFTC will be available for a film with a budget (or total core expenditure) up to £15m and must have received a new accreditation from the BFI. The BFI tests are likely to require that either the key talent on the film, such as the director or writer must be from the UK, or the film must be an international co-production.  

The credit rate will be increased to 53% of qualifying expenditure, with qualifying expenditure continuing to be capped at 80% of the film’s core expenditure. The maximum relief available under the AVEC will be £6.36m. The changes will take effect for films commencing and expenditure incurred from 1 April 2024, with claims being submitted from 1 April 2025.   

Films not qualifying as an independent film will continue to claim at the basic rate of 34% (or 39% for animated films).   

Theatre, orchestra, museum and galleries tax reliefs

Legislation will be introduced in the Spring Finance Bill 2024 to make permanent 40%/45% (for non-touring, touring and orchestral productions respectively) headline rates of relief for Theatre Tax Relief, Orchestra Relief, and Museums and Galleries Exhibition Tax Relief. These rates will take effect from 1 April 2025. The rates are 5% lower than the current rates, however these were due to taper back to pre-covid rates of 30%/35% from 1 April 2025, therefore the (lower than expected) reduction will be a welcome relief.  However, the 5% reduction will still have a significant impact to these industries. 

From 1 April 2024, all claims must be accompanied by an additional information form, which includes all the necessary evidence to support claims. 

Watch our Spring Budget question time webinar

Following the Spring Budget, our panel of specialists examined the announcements made by The Chancellor, discussing what these changes mean for you. They also answered questions from our live audience. This webinar is now available to watch on demand here.

Alternatively, if you would like any further information or guidance on this topic, get in touch with your usual Kreston Reeves contact or contact us here.