Creative industry tax reliefs

What audio-visual expenditure credits (AVECs) are available?

AVEC rates (from 1 January 2024)

• 39% of qualifying expenditure for animated film/TV productions and children’s TV. (For a production to qualify for these expenditure credits at least 51% or core costs should be spent on animation).
• 34% of qualifying expenditure for non-animated film/TV productions, non-children’s TV and video games.
• From 1 April 2025, films and TV programmes with a rate of 34% can claim further credit for visuals effects costs. This applies to costs incurred from 1 January 2025, and has a rate of 39% of qualifying expenditure.

Key thresholds & rules

• Expenditure threshold for HETV remains at an average of £1m per hour of slot length.
• The relief available for visual effects expenditure has increased from 34% to 39%.
• 80% cap on total core costs for all expenditure credits, except for visual effects, which is exempt.

Who can claim and when?

• The credits became available to claim after the tax period ending on or after 1 January 2024.
• The previous tax reliefs (film, television, VGTR, etc.) will remain available until 1 April 2027, allowing productions that started before 1 April 2025 to choose which scheme to claim under, while those that commenced after this date must claim expenditure credits. This also applies to VGECs.

How much relief is claimed?

During the 2023/24 tax year, UK companies claimed £2.4 billion through various reliefs, encompassing both the previous audio-visual relief schemes and the newly introduced expenditure credits. This represents a 9% increase compared to the prior year. The increase was primarily attributable to higher claims for HETV Tax Relief and FTR which accounted for 46% and 22% of the total, respectively.

Number of claims by the different CITRs from 2017-18 to 2023-24

Film and Theatre consistently have the highest number of claims each year, accounting for 22% and 32% of total claims in 2023-24, respectively. Both were negatively affected by the COVID-19 pandemic, but their recovery in the years following has been different.

FTR claims have since increased following the 20% decrease in 2020-21 but only reached pre-pandemic levels in 2023-24. One of the reasons behind this is the recent increase in the number of films produced for streaming services as they typically claim HETV relief instead of FTR. This reasoning is also behind the similar trend seen in the amount of relief that has been paid out, with the difference being that the amount of relief paid out still has not returned to pre-pandemic levels.

Theatres were heavily hit by the pandemic as restrictions led to a plummet in productions. The number of TTR claims also saw a drastic decrease of over a third in 2020-21. However, 2023-24 highlights the continued strong recovery seen in 2022-23 for this industry, with the number of claims for this year increasing and remaining above pre-pandemic levels.

It is possible that the temporary increase in the relief rates of TTR contributed to this. Announced by the government in 2021 for productions that commenced production on or after 27 October 2021, it increased the tax credit rate for touring productions from 25% to 50% and non-touring productions from 20% to 45% allowing for the value of relief available to be more than doubled. This rate increase was made permanent during the 2024 Spring Budget; however, from 1 April 2025, the rates were changed to 45% for touring and 40% for non-touring productions.

Amount of relief paid for the different CITRs from 2017-18 to 2023-24

Following the pandemic, HETV relief overtook FTR in the amount of relief paid out, accounting for 46% of the total relief paid out in 2023-24. The growth of this tax relief is largely due to an increase in high-budget productions. Additionally, HETV relief’s growth over the past few years follows what has been seen by the British Film Institute regarding HETV production expenditure. The substantial growth witnessed is partially due to the increase in feature length films that are created solely for streaming services as they claim HETV relief instead of FTR.

As the VGTR was not impacted by the pandemic in the same way as the other reliefs, it has seen a steady increase in both the number and value of claims. In 2023-24, £327m of relief was paid out, a 12% increase from the previous year.

Cultural tax reliefs, defined as tax reliefs for theatres, orchestras, museums and galleries, paid out a record £339m for 2023-24, a 57% increase from the previous year. Around 77% of this was attributed to TTR, with the amount of relief paid being £261m, a 65% increase from the previous year.

The table below shows the total number and value of claims made for AVEC and VGEC up to and including 11 June 2025, by relief type, covering claims relating to both the 2023-24 and 2024-25 financial years. These figures are not uplifted to account for claims yet to be received and represent only claims that have been paid out to date. In next year’s publication, we expect to have received sufficient claims across all schemes to present data on AVEC, VGEC, and the tax reliefs, separately.

Closing thoughts

As the UK’s creative sectors continue to grow, the added support provided by renewed expenditure credits and tax reliefs, can make production more accessible and financially viable. The new schemes, like the audio-visual expenditure credits and the enhanced Film Tax Credit, should give companies more opportunities than ever to reduce costs and reinvest in their work. Staying informed on these updates ensures productions can maximise available support.

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