From 30 October 2024, eligible companies will be able to apply for certification to receive the enhanced uplift in AVEC at a rate of 53% for qualifying expenditure incurred on or after 1 April 2024.
On 9 October 2024, the government introduced new regulations to implement the Independent Film Tax Credit (IFTC).
- The IFTC provides additional relief for low-budget films with specified UK connections as was announced in the 2024 Spring Budget.
- The IFTC allows eligible companies to claim an enhanced Audiovisual Expenditure Credit (AVEC) at a rate of 53% on their qualifying expenditure. The current basic rate of AVEC for Films is 34%.
- To qualify for IFTC, films certified as British Films must meet both:
- The budget condition. The total core expenditure in relation to the film must not exceed £23,500,000.
- The creative connection condition
- The film must have a director or scriptwriter who is a British Citizen or ordinarily resident in the UK, or be an official UK co-production.
- If a film has multiple directors and/or scriptwriters, the creative connection condition can be satisfied by reference to any lead director or lead scriptwriter.
- Qualifying expenditure will be capped at a maximum of 80% of a film’s total core expenditure. The taxable credit for a film will be capped at £6.36 million.
- From 30 October 2024, eligible companies can apply for an eligibility certificate from the British Film Institute.
- Claims for the IFTC can be submitted to HMRC from 1 April 2025, covering expenditure incurred from 1 April 2024.
- The new regulations outline the specific evidence that must be provided in applications to access the IFTC.
Useful guides on this topic
Creative Industries Tax Reliefs: At a glance
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)?
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: 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: 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?
External Link
UK Parliament: Independent Film Tax Credit - Statement made on 9 October 2024
