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You are here: Home / Companies / Running the business

/ Creative Industries Tax Reliefs: At a glance

Creative Industries Tax Reliefs: At a glance

 Last Updated: 24 January 2024

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1/25/24, 4:59 PM Creative Industries Tax Reliefs: At a glance - www.rossmartin.co.uk

Creative Industries Tax Reliefs are a suite of company tax reliefs that provide enhanced Corporation
Tax relief on expenditure and repayable tax credits in loss making situations. They are similar in
form to Research & Development (R&D) tax relief.

This is a freeview 'At a glance' guide to tax reliefs for Creative Industries.

Creative Industries Tax Reliefs provide tax relief

Apply to the Relief Claim mechanics: from 1/1/2024

production of:

Film Film Tax Relief 34% Audio-Visual Expenditure Credit

(AVEC)

Animation Animation Tax Relief 39% Audio-Visual Expenditure Credit

(AVEC)

High-end TV High-End TV Tax Relief 34% Audio-Visual Expenditure Credit

(AVEC)

Children's TV Children’s TV Tax Relief 39% Audio-Visual Expenditure Credit

(AVEC)

Video Games Video Games Tax Relief 34% Video Games Expenditure Credit
(VGEC)

Theatre Theatre Tax Relief

Enhanced expenditure by 100%
Orchestral performance Orchestra Tax Relief

Museum & Gallery Museum & Gallery Exhibitions

exhibitions Tax Relief

For accounting periods after 1 January 2024 companies claim AVEC or VGEC claim

The AVEC or VGEC is based on the R&D relief RDEC claim mechanism.
Tax relief at 34% or 39% by adding that percentage of their expenditure to their taxable profits
and then deducting the same amount from their corporation tax liability - see example
in Audio-Visual & Video Games Expenditure Credit (AVEC) or (VGEC)

The Original relief: for accounting periods up to 1 January 2024 qualifying companies can claim
either:

An additional tax deduction (an enhancement) of up to 100% of enhanceable expenditure or,

If a loss is surrendered, 25% of the loss up to the amount of enhanceable expenditure.
Enhancable expenditure is broadly, the lesser of

UK qualifying expenditure
80% of total qualifying expenditure

Each type of relief has its own specific conditions however the reliefs are aimed at creative
productions based in the UK.

Calculation of the AVEC or VGEC

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The credits will be calculated directly from a production or game’s qualifying expenditure,
unlike the previous rules which created an adjustment to claim enhanced expenditure from the
company’s taxable profit.
These operate in a similar way to a the Research & Development Tax Credit (RDEC) which
means that:

The AVEC or VGEC credit must not be higher than your company’s total expenditure on
employee PAYE and NICs for the accounting period. Amounts in excess of the cap are
carried forward for use in future periods.

E.g. AVEC claim With AVEC Without

Profit 700,000 700,000

AV costs £600,000 x 34% 204.000

Taxable profits 904,000 700,000

Co Tax @ 25% 206,000 175,000

Less: AVEC (204,000) -

Tax payable 2,000 175,000

Tax saved 153,000

% 25.5%

The credit can be claimed voluntarily but all new productions must claim under the new
scheme from 1 April 2025, and all productions from 1 April 2027.

Useful guides on this topic

Film, Animation & TV reliefs

Subscriber guide to Film, Animation and TV tax relief are three reliefs that are part of the UK's suite
of creative industry tax reliefs

Video Games Tax Credits & Reliefs

What is Video Games Expenditure Credit, what is Video Games relief? Who can claim video games
tax relief?

Theatrical Production tax relief

What is Theatre Tax Relief (TTR)? Who can claim it? What are the conditions?

R&D Zone
How to calculate RDEC relief with losses and interactions with SME reliefs: worked examples and
templates

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