What the UK's AVEC credit requires, from British certification to a 10% UK cost test

The Audio-Visual Expenditure Credit, known as AVEC, is the UK's tax credit for film, high-end television, animation and children's television productions. It is calculated as a percentage of qualifying spending in the UK, and it is available only to productions that are certified as British.

HM Revenue and Customs (HMRC) sets the tax rules, and the British Film Institute (BFI) carries out the certification process. The rules differ by production type and by start date, so the figures below should be checked against the live guidance before any budget is set.

Which reliefs AVEC replaced, and the deadlines

AVEC took over from the earlier film, high-end TV, animation and children's TV reliefs. Companies can claim it for expenditure incurred from 1 January 2024. Video games have a separate credit, VGEC, which is not covered here.

The reform guidance sets a staged timetable. New productions had to claim under AVEC from 1 April 2025, and all productions must claim under it from 1 April 2027, when the older schemes end. Transition rules apply between the old and new schemes; the sources summarise them only briefly, and HMRC's manual covers them in Chapter 9.

The cultural test and British certification

A film or TV programme must be certified as British before it can claim AVEC. According to GOV.UK, certification comes either from a cultural test or from an international co-production treaty. The BFI issues an interim certificate for work still in production and a final certificate once the work is complete. The certificate must still be in date when the claim is submitted.

The high-end TV cultural test is points-based. A project needs 18 out of 35 points to pass. The points come from four sections: cultural content (up to 18), cultural contribution (up to 4), cultural hubs (up to 5) and cultural practitioners (up to 8).

The BFI's high-end TV page does not state a budget or per-episode threshold. It refers readers to the full AVEC guidance for the eligibility criteria.

Identity checks now apply to company directors. The BFI says the check was voluntary from 1 May 2026 and became mandatory from 1 June 2026, for applications submitted on or after those dates. Company director details must be provided, and the form can be completed on a director's behalf. A company with more than one director needs an application for each one.

The 10% UK spend rule and the 80% cap

Each qualifying production must have at least 10% of its core costs relating to goods and services used or consumed in the UK. HMRC's AVEC overview states this rule in its qualifying criteria and points to a separate manual section for the detail.

Drama, comedy and documentary TV face a further test. Their average core costs must be at least £1 million per hour of slot length, and the slot must be longer than 20 minutes per episode.

The credit is calculated on qualifying expenditure, which is the lower of 80% of total core costs or the amount of UK core costs. Only the production company for a qualifying production can claim AVEC. Other companies in the production chain cannot make the claim themselves.

Rates: 34%, 39%, 53% and the visual effects uplift

The standard rate is 34% for films and high-end TV. Children's TV, animated films and animated TV receive 39%. Independent films can claim 53% under the enhanced rate, which GOV.UK says applies to productions that began principal photography from 1 April 2024.

The sources state the enhanced independent-film limit in different ways. GOV.UK says the rate applies to up to £15 million of core costs and lists a core costs limit of £23.5 million. The BFI's About page describes a total core expenditure limit of £23.5 million, with the enhanced rate paid on the first £15 million. A BFI news item, however, says the enhanced rate can be claimed on up to a maximum of 80% of £15 million of the core expenditure. Projects above £23.5 million can claim only the standard rate.

A visual effects uplift raises the rate to 39% for UK VFX costs on productions claiming the 34% rate. It covers costs incurred from 1 January 2025, and those costs are exempt from the 80% cap. The uplift is not available to films claiming the enhanced independent rate.

The BFI presents the new rates as equivalents of earlier figures. It lists 34% as equal to 25.5%, 39% as 29.25% and 53% as 39.75% under the previous system. Its news item on the VFX measure describes 29.25% as the after-tax figure for the 39% rate.

How the credit is taxed, paid and claimed

The credit is taxable at the main Corporation Tax rate. It first offsets a company's Corporation Tax liability and then its other tax liabilities. It can also be surrendered to group companies. Any amount left over is paid out as a payable credit.

The GOV.UK guidance does not explain the refund mechanics in detail. The HMRC manual is the place where those mechanics are set out, and it should be read alongside the claim guidance.

A claim can be made, amended or withdrawn up to two years after the end of the period of account the claim relates to. Returns submitted on or after 6 April 2026 must include the CT600P Creative Industries supplementary page.

Why studios look at the credit, and what the sources leave out

The BFI's news item on the enhanced VFX measure says it will help attract and retain visual effects work in the UK in an increasingly competitive international landscape. The BFI's chief executive, Ben Roberts, called the measure "great news for our industry".

The sources read for this article do not describe how studios based in Los Angeles or other West Coast producers compare the UK with other locations, and they contain no figures on those decisions. What they do set out is the structure a production would plan around: a 34% headline rate on qualifying UK spend, a 10% UK core-cost test, a cultural test score, an 80% cap on qualifying costs and a taxable payout.