The TV and film industry in Manchester is a growing and competitive sector, and securing financial support can be critical to the success of your project.

There are several current tax relief schemes available for film and television productions, but it is worth a specific focus on the Audio-Visual Expenditure Credit (AVEC).

This is replacing previous reliefs:

• Film Tax Relief (FTR)
• Animation Tax Relief (ATR)
• High-End Television Tax Relief (HTR)

However, there remains a transition period so while you can’t apply for the previous reliefs, you may still be in the process if you have used these in the past. +

What do you get with the AVEC?

You can claim expenditure credit on qualifying costs, which are calculated as the lower of 80 per cent of total core costs or the amount of UK core costs.

The credit is available at:

• 39 per cent for children’s TV, animated films and animated TV programmes
• 53 per cent for independent films
• 34 per cent for other qualifying films and TV programmes

From 1 April 2025, films and TV programmes claiming at 34 per cent can also claim additional credit for eligible visual effects costs, which are claimed at 39 per cent and are not subject to the usual 80 per cent cap.

The credit is taxable at the main rate of Corporation Tax and is first used to reduce your Corporation Tax bill, with any remaining amount potentially offset against other tax liabilities, surrendered to group companies or paid to the company.

How to qualify for the AVEC

To qualify for the expenditure credit, a production must meet certain conditions.

For films, the production company can claim if the film:

• Has been certified as British by the British Film Institute
• Is intended for theatrical release
• At least 10 per cent of its core costs relate to UK-based activities

A film will be treated as an animation if at least 51 per cent of its core costs are spent on animation.

There are also specific rules for independent films.

The production must be certified as a low-budget film by the British Film Institute to qualify as an independent film.

It also must start principal photography on or after 1 April 2024, have a UK writer or director or be an official co-production and have core costs of less than £23.5 million.

For TV programmes, the company can claim if the programme is certified as British by the British Film Institute, is intended to be broadcast to the general public, including via online streaming, and at least 10 per cent of its core costs relate to UK-based activities.

The programme must be one of the following:

• Drama
• Comedy
• Documentary
• Animation
• Children’s programming*

For dramas, comedies and documentaries the programme must have average core costs of at least £1 million per hour of slot length and each episode must have a slot length of more than 20 minutes.

Where TV programmes are commissioned together, they are treated as a single programme for these purposes.

Core costs generally cover the main production stages, including pre-production, principal photography and post-production.

*A children’s programme is one where the main expected audience is under 15.

What are the benefits beyond just tax relief?

Beyond tax relief, AVEC helps attract investment, lower costs, and increase the financial viability of your project.

While the immediate cash injection can be crucial, the long-term advantage is the potential to reinvest savings into other areas of the business, improving cash flow and expanding your creative horizons.

However…

• Timing is everything: The process of claiming relief can be lengthy, often taking up to six months to process. Plan ahead to ensure your claims align with the production timeline.
• Documentation is key: Make sure you maintain detailed records of all eligible expenditure. The more organised and transparent your accounts, the smoother the claim process.
• Do not overlook smaller productions: SMEs in the TV and film industry often think tax relief is reserved for large-scale productions. However, smaller productions can qualify, too.

From preparing the cultural test application to helping you monitor qualifying expenses, our role as an accountant is to provide the expertise needed to optimise your production’s financial performance.

It’s worth engaging an accountant who specialises in media and entertainment as our insights will allow you to focus on what matters most – producing great content.

To speak to a film and TV tax expert in Manchester, please click here.