Consultation outcome

Consultation on additional tax relief for visual effects costs

From:: HM Treasury
Published: 27 March 2024
Last updated: 30 October 2024 — See all updates

Read the full outcome

Consultation on additional tax relief for visual effect costs - summary of responses

Ref: ISBN 978-1-917151-42-9

PDF, 167 KB, 16 pages

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Detail of outcome

From 1 April 2025, film and high-end TV companies will be able to claim additional tax relief on their UK visual effects costs. This will be delivered through the Audio-Visual Expenditure Credit (AVEC): companies will receive an enhanced 39% rate of AVEC (a 5 percentage point increase on the normal rate of 34%) on their UK visual effects costs. UK visual effects costs will be exempt from AVEC’s 80% cap on qualifying expenditure. Costs incurred from 1 January 2025 will be eligible for the additional tax relief.

These changes to AVEC will be legislated for in the next Finance Bill. The government expects the next Finance Bill to be published in full following the introduction of the Bill.

This will contain proposed legislation for the additional tax relief.

A consultation on the design of the additional tax relief ran from 27 March 2024 to 22 May 2024.

Original consultation

Consultation description

At Spring Budget 2024, the government announced that UK visual effects costs in film and high-end programmes will receive a 5% increase in Audio-Visual Expenditure Credit (total rate 39%). UK visual effects costs will also be exempt from the Audio-Visual Expenditure Credit’s 80% cap on qualifying expenditure. These changes will take effect from 1 April 2025.

This document sets out more detail about how the additional tax relief will work and invites comments on the government’s proposed policy design, including the types of costs that will qualify. The document also provides the government’s response to submissions to the call for evidence on the UK visual effects sector, which ran from 22 November 2023 to 10 January 2024.

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