As a founder in the creative industries, whether you're making films, designing video games, producing animations, or staging theatrical performances, it's vital to understand the UK government's enhanced tax incentives tailored specifically for you. These incentives are designed not only to support your industry's growth but also to significantly reduce your production costs.
Here's your jargon-free guide to the latest UK creative industry tax reliefs:
Audio-Visual Expenditure Credit (AVEC)
Replacing Film Tax Relief, High-End Television Tax Relief, and Animation Tax Relief from April 2025, AVEC provides:
- 34% credit for films and high-end TV programmes
- 39% enhanced credit for animation and children’s TV/film productions
- 53% enhanced credit (IFTC) for low-budget films
Qualifying visual effects (VFX) costs for film and high-end TV productions specifically benefit from a net rate of 29.25% from April 2025.
Eligible expenses include filming, post-production, visual effects and other production-related costs.
Video Games Expenditure Credit (VGEC)
For game developers creating culturally British video games, VGEC replaces the old Video Games Tax Relief, offering:
- 34% credit on qualifying development costs
Ideal for both indie studios and established developers, VGEC supports your game's development at every stage.
Theatre Tax Relief (TTR)
Significantly enhanced from April 2025, Theatre Tax Relief reduces production costs:
- 45% credit for touring productions
- 40% credit for non-touring productions
Orchestra Tax Relief (OTR)
From April 2025, orchestras can claim:
- 45% credit on eligible rehearsal and performance costs, ensuring sustainability in the arts sector.
Museums and Galleries Exhibition Tax Relief (MGETR)
This relief is now permanent and has increased from April 2025:
- 45% credit for touring exhibitions
- 40% credit for non-touring exhibitions
Important Updates and Eligibility Requirements
Transition Deadlines: New productions must use the new expenditure credit regime (AVEC, VGEC, etc.) from 1 April 2025, with all productions required to switch by 1 April 2027. For productions straddling the transition date (with accounting periods before and after 1 April 2025) separate calculations must be made for each period.
Eligibility Criteria: Your company must pay UK Corporation Tax, be directly involved in production and typically pass the BFI's British cultural test. The BFI manages the cultural test certification process for AVEC and VGEC claims.
Administrative Changes: From 1 April 2024, claims require an additional information form. From 2025, more detailed disclosures are necessary, particularly for connected-party transactions and visual effects.
Loss-Making Companies: These can still surrender losses for a payable credit under the new system.
Business Rates Relief: Eligible film studios in England receive a 40% business rates relief for ten years starting April 2024.
How to Claim These Reliefs
Claims are made via your corporation tax return submitted to HM Revenue & Customs (HMRC). Accurate record-keeping and detailed documentation of expenses are crucial.
Maximise Your Opportunities
These improved incentives exist to fuel your creativity, reduce your financial risks and foster industry growth. Partnering with an accountant specialising in the creative sector ensures you fully leverage these opportunities.
Harness these tax incentives to reinvest into your creative ambitions and secure a vibrant, successful future for your business.
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