What are Creative Industries Tax Reliefs? Which Creative Industries Tax Relief are you eligible for? When should relief be claimed under Audio-Visual Expenditure Credit (AVEC) and Video Games Expenditure Credit (VGEC)?
This is a freeview 'At a glance' guide for Creative Industries Tax Reliefs.
Companies engaged in producing films, animation, high-end TV, children's TV, video games, theatre performances, orchestral performances, and museum & gallery exhibitions can claim a special Corporation Tax relief in respect of their production costs.
Summary of the reliefs avalible:
Apply to the production of: |
The Original Relief |
Expenditure Credits |
Film | Film Tax Relief (FTR) | |
Animation | Animation Tax Relief (ATR) | 39% Audio-Visual Expenditure Credit (AVEC) |
High-end TV | 34% Audio-Visual Expenditure Credit (AVEC) | |
Children's TV | 39% Audio-Visual Expenditure Credit (AVEC) | |
Video Games | 34% Video Games Expenditure Credit (VGEC) | |
Theatre | Theatre Tax Relief (TTR) |
TTR, OTR and MGETR are unaffected by the reform to expenditure credits. |
Orchestral performance | ||
Museum & Gallery Exhibitions |
Reform to expenditure credits
- For qualifying expenditure incurred on or after 1 January 2024 companies can:
- Claim The 'Original Relief', or
- Opt in to claim Expenditure Credits (AVEC or VGEC).
- New productions must claim under AVEC or VGEC from 1 April 2025.
- All productions must claim under AVEC or VGEC from 1 April 2027.
- The Original Relief for FTR, ATR, HETR, CTR and VGTR will cease on 31 March 2027.
The Original Relief
For qualifying expenditure incurred, qualifying companies can:
- Claim an additional tax deduction (an enhancement) of up to 100% of enhanceable expenditure.
- Surrender a loss for a 25% payable tax credit. The surrenderable loss is the lower of:
- The company's available loss, and
- The available qualifying expenditure (enhanceable expenditure)
- Enhanceable expenditure is broadly, the lesser of:
- Core expenditure on goods or services that are used or consumed in the United Kingdom.
- 80% of total core expenditure.
Each FTR, ATR, HETR, CTR and VGTR has it's own specific conditions. The reliefs are aimed at creative productions based in the UK.
Expenditure Credits
- The AVEC and VGEC operate in a similar way to the Research & Development Tax Credit (RDEC).
- Tax relief is received by adding a percentage (34% or 39%) of the qualifying expenditure to taxable profits and then deducting the same amount from the corporation tax liability - see Creative Industries: AVEC worked example
- Similar to The Original Relief, broadly, the AVEC or VGEC is the lesser of:
- UK qualifying expenditure.
- 80% of total qualifying expenditure.
- In loss making periods, some or all of the loss can be surrendered for a payable tax credit. see Creative Industries: AVEC worked example (with losses)
Remaining Creative Industries Tax Reliefs
- Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR) and Museums & Galleries Tax Relief (MGETR) are unaffected by the reform to expenditure credits.
- The rates of relief remain at 50% for touring and all orchestra productions and 45% for non-touring productions until 31 March 2025.
Administrative changes
- From 1 April 2024 all Creative Industry Tax Relief claims must include an Additional Information Form (AIF).
Useful guides on this topic
Creative Industries: Additional Information Form (AIF)
What are the additional information requirements? When should you complete the Additional Information Form (AIF)? What information is required?
Creative Industries: Audio-Visual Expenditure Credit (AVEC) & Video Games Expenditure Credit (VGEC)
Audio-Visual Expenditure Credit (AVEC) will replace Film Tax Relief (FTR), High-End TV Tax Relief (HETR), Animation Tax Relief (ATR), and Children’s TV Tax Relief (CTR). Video Games Expenditure Credit (VGEC) will replace Video Games Relief (VGTR).
Creative Industries: AVEC worked example
How to calculate the Audio-Visual Expenditure Credit (AVEC) and Video Games Expenditure Credit (VGEC)?
Creative Industries: AVEC worked example (with losses)
How to calculate the Audio-Visual Expenditure Credit (AVEC) and Video Games Expenditure Credit (VGEC)? How to determine the credit repayable to the company if it incurs losses?
Creative Industries: Film Tax Relief and Television Tax Relief
Film Tax Relief (FTR), High-End TV Tax Relief (HETR), Animation Tax Relief (ATR) and, Children’s TV Tax Relief (CTR) are part of the UK's suite of creative industry tax reliefs.
Creative Industries: Video Games Tax Reliefs (VGTR)
What is Video Games Tax Relief (VGTR)? Who can claim VGTR? When will VGTR cease?
Creative Industries: Theatre Tax Relief (TTR)
What is Theatre Tax Relief (TTR)? Who can claim it? What are the conditions?
Creative Industries: Orchestra Tax Relief (OTR)
What is Orchestra Tax relief? What are the qualifying conditions? What is the rate of relief?
Creative Industries: Museum & Gallery Exhibitions Tax Relief (MGETR)
What is Museum & Gallery Exhibitions Tax Relief? When does it apply?
R&D Zone
How to calculate RDEC relief with losses and interactions with SME reliefs: worked examples and templates
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