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
production of:
Relief Claim mechanics: from 1/1/2024
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 exhibitions  Museum & Gallery 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

  • 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