Film tax relief has been replaced. The Audio-Visual Expenditure Credit gives 34% on film and high-end TV, 39% on animation and children's TV, 39% on UK visual effects costs, and 53% for qualifying independent films. The old reliefs closed to new productions on 1 April 2025 and close entirely on 1 April 2027.
The transition
Three dates govern which regime applies. AVEC could be claimed on expenditure incurred from 1 January 2024. It became mandatory for new productions from 1 April 2025. And the former reliefs cease on 1 April 2027 — expenditure incurred from that date can only be relieved under AVEC, for all productions.
For film tax relief specifically: no claim is possible for productions that start principal photography after 31 March 2025, and the relief closes for all productions from 1 April 2027. There is a transitional wrinkle worth knowing — for productions begun before 1 April 2025 that had not commenced principal photography by that date, only AVEC applies to expenditure from 1 April 2025.
The rates
- 34% — films and TV programmes generally, including high-end TV;
- 39% — children's TV programmes, animated films and animated TV programmes;
- 39% — UK visual effects costs, from 1 April 2025;
- 53% — qualifying independent films under the Independent Film Tax Credit.
These are gross credit rates. The credit is itself taxed: a company's total expenditure credits for a period are taxed at the main rate of corporation tax and then used to pay off the corporation tax liability. The credit is added to profit or loss as a taxable receipt even where the company is loss-making.
Be careful with net figures. HMRC does not publish net-of-tax percentages, so any you see are arithmetic rather than quoted. The one net illustration HMRC does give is for the independent film credit: a maximum credit of £6.36 million before tax, which it illustrates as roughly £4.77m net at the 25% rate. HMRC's own press release gives a useful cross-check per £1m of qualifying expenditure — an extra £42,500 for children's and animated productions, and £5,000 for high-end TV, film or video games, against the previous reliefs.
What qualifies
Two caps and one floor:
- Qualifying costs are the lower of 80% of total core costs, or the amount of UK core costs. The 80% cap is the binding constraint on most large productions;
- At least 10% of core costs must relate to activities in the UK. It is 10%, not 40% — that figure appears in some commentary and is wrong;
- British certification. All films and TV programmes must be certified as British, through the cultural test or an internationally agreed co-production treaty. The BFI manages certification on behalf of DCMS, issuing an interim certificate for uncompleted work and a final certificate once production has finished. A certificate must be valid and in force when it accompanies a claim.
Other conditions by category: films must be intended for theatrical release; animated films and TV need at least 51% of core costs spent on animation; children's TV needs a primary audience expected to be under 15. High-end TV must be intended for broadcast including streaming, in the permitted genres — drama, comedy, documentary, animation, children's — and for dramas, comedies and documentaries needs average core costs of at least £1 million per hour of slot length, with slot length over 20 minutes per episode.
The Independent Film Tax Credit
The 53% rate is the most generous in the regime, and the eligibility is tighter than the headline suggests. Two different figures are involved and they get confused:
- £23.5 million is the eligibility ceiling — a film is an independent film if total core expenditure does not exceed that;
- £15 million is the claimable cap — a production company may only include up to £15m of relevant global expenditure in its credit calculation.
Beyond the budget condition, a film needs a BFI low-budget certificate in addition to the cultural test, and must meet a creative connection condition: either it is an official co-production under the Council of Europe Convention or a UK bilateral treaty, or it has a UK lead writer or director who is a British citizen or ordinarily resident here. A co-production does not also need a UK writer or director. Where there are several, the qualifying person must be the lead.
Principal photography must have commenced on or after 1 April 2024, the film must be intended for theatrical release, and the 10% UK spend and 80% cap both apply. Claims were submittable from 1 April 2025 for expenditure incurred from 1 April 2024.
The visual effects uplift
From 1 April 2025, companies can claim an enhanced 39% on UK VFX costs, up from 34% — and, significantly, the 80% cap is removed for UK VFX costs. Qualifying VFX expenditure incurred from 1 January 2025 is eligible.
Two restrictions. The VFX credit can only be claimed for the completion period of a production or for post-completion periods. And it is available only for a high-end TV programme or a film that is not an animation and not a certified low-budget independent film — so the 53% and 39% routes do not stack.
Claiming it
Claims go on the company tax return, supported by an additional information form. For returns submitted on or after 6 April 2026, the CT600P creative industries supplementary page must be included.
The claim window is two years after the end of the period of account the claim relates to, for making, amending or withdrawing a claim. And from accounting periods beginning on or after 26 November 2025, companies must claim special credit for every accounting period in which they claim regular AVEC, excluding pre-completion periods.
Our guide to creative industries tax relief covers the video games credit and the cultural reliefs for theatre, orchestra and exhibitions.
Acumon advises production companies on expenditure credits and the surrounding compliance through corporation tax and business tax work, with statutory audit and production accounting alongside. If a production begins principal photography this year, the certification route and the 10% UK spend test are the two things to settle at the outset.