Creative Sector Tax Reliefs and Audio-Visual Expenditure Credit (AVEC)

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The UK’s creative sector is a global leader in innovation and cultural output. To support its growth, the government provides a range of Creative Sector Tax Reliefs (CSTRs), enabling companies to claim back on core production costs and reinvest in future projects.

The financial impact of these reliefs can be transformative for creative businesses, helping them to:

Boost cash flow by reducing tax liabilities and freeing up working capital.
Expand production capacity by creating more financial flexibility for ambitious projects.
Attract and retain talent by allowing reinvestment in skilled creative professionals.

While the benefits can be substantial, the rules are complex and many businesses are unaware they qualify or are not claiming their full entitlement.

At Azets, our creative sector tax specialists unlock the full value of these incentives, manage the move from legacy reliefs to AVEC/VGEC, and keep HMRC compliance straightforward from BFI certification through to submission

Specialist support across the creative sector

From film, TV and animation to theatre, museums, galleries, orchestras and video games, our team can help identify the reliefs available for your production or project.

Maximise eligible expenditure

We help you understand which costs qualify, which are excluded and how to structure your claim to make the most of the relief available.

Stay ahead of tax changes

With several creative reliefs moving to expenditure credit regimes, we can guide you through transitional rules, eligibility requirements and claim calculations.

End-to-end claim support

We can support with eligibility reviews, calculations, additional information forms and submission requirements as part of your company tax return.

What are Creative Sector Tax Reliefs?

Creative Sector Tax Reliefs are government-backed incentives designed to reduce the cost of producing culturally valuable content in the UK. The Audio-Visual Expenditure Credit (AVEC) was introduced as part of the government's reform of creative industry tax reliefs and is gradually replacing several previous film and television tax relief regimes.

AVEC rates: film, TV, animation and independent film (IFTC)

AVEC is a taxable expenditure credit, meaning the headline rate and the cash you actually receive are different numbers. Here's how the current rates break down.

AVEC for Film
AVEC for High-End Television
AVEC for Children’s Television

Regime	Gross credit rate	Net cash value (after tax)	Who it's for
Standard AVEC (film & HETV)	34%	25.5%	Qualifying films and high-end TV
Animation & children's TV	39%	29.25%	Qualifying animation and children's TV
Independent Film Tax Credit (IFTC)	53%	39.75%	Films with core expenditure up to £15m (tapered up to £23.5m)
VFX uplift	39%, no 80% cap on VFX spend	29.25% on VFX costs	UK visual effects costs on film/HETV productions
VGEC (video games)	34%	25.5%	Qualifying UK video game development

This new framework replaces the former Film Tax Relief (FTR), High-End Television Tax Relief (HTR), Children’s Television Tax Relief (CTR), and Animation Tax Relief (ATR). AVEC operates as an expenditure credit, bringing more transparency and potentially higher rates for qualifying production costs.

Other Creative Sector Tax Reliefs (Theatre, Orchestra, Museums & Galleries)

Not every creative relief is affected by the AVEC/VGEC transition. Theatre Tax Relief, Orchestra Tax Relief and Museums & Galleries Exhibition Tax Relief remain unchanged and available in their current form.

Theatre Tax Relief (TTR): tax credits of 45% for touring productions and 40% for other qualifying productions, on qualifying production and closing phase costs up to 80% of core expenditure.
Orchestra Tax Relief (OTR): a repayable credit worth 45% of eligible losses on qualifying concert and performance costs.
Museums & Galleries Exhibition Tax Relief (MGETR): 45% for touring exhibitions and 40% for non-touring exhibitions, capped at £100,000 and £80,000 respectively.

Each of these reliefs plays a vital role in making UK-based creative production more affordable and competitive.

How Azets can support your claim

The eligibility requirements and application process for CSTRs and AVEC can vary significantly depending on the type of production. Our specialist team works closely with you to assess eligibility, prepare robust claims, and ensure compliance with HMRC’s latest requirements.

We provide:

A holistic and joined-up approach, with Creative Sector Relief specialists working alongside our Corporate Tax Compliance team.
A local team delivering your claim, backed by Azets’ national infrastructure.
Flexible fee options including contingent fees (for non-audit clients), fixed fees, and phased fees.
Access to a Tax Investigation Service which covers the cost of HMRC enquiries you may face in the future.
A personal, approachable service, taking the time to understand your wider business objectives.
BFI certification support, including cultural test and IFTC test applications.
CT600P and Additional Information Form preparation, prepared alongside your wider company tax return.

Our team has deep sector expertise and the experience to ensure your Creative Sector Tax Relief or AVEC claim is maximised while keeping the process smooth and efficient.

Creative Sector Tax Reliefs and Credits

Audio-Visual Expenditure Credit (AVEC) supports the production of qualifying British films, high-end television programmes, children's television programmes and animations by providing a taxable expenditure credit on eligible production costs.

Introduced as part of the government's reform of creative industry tax reliefs, AVEC replaces the previous Film Tax Relief and Television Tax Relief regimes and is designed to encourage continued investment in UK screen production.

Relief is available on qualifying pre-production, principal photography and post-production expenditure, with qualifying expenditure capped at 80% of core costs. Eligible films and high-end television productions can claim a taxable credit worth 34% of qualifying expenditure, while qualifying animation and children's television productions can claim 39%, providing enhanced support for these sectors.

The UK Independent Film Tax Credit (IFTC) supports the production of eligible British independent films by providing an enhanced tax credit on qualifying expenditure.

Available to qualifying Film Production Companies, the credit forms part of the Audio-Visual Expenditure Credit (AVEC) regime and is designed to encourage investment in the UK film industry.

Relief is available on qualifying pre-production, principal photography and post-production costs, with qualifying expenditure capped at 80% of total core costs. Eligible productions can claim a taxable expenditure credit worth 53% of qualifying expenditure, offering significantly greater support than the standard 34% AVEC rate available for films.

Video Games Expenditure Credit (VGEC) supports UK-based video game development by providing a tax credit for qualifying expenditure on British video games.

Available to eligible Video Games Development Companies (VGDCs), the regime replaces the previous Video Games Tax Relief and is designed to encourage investment in the UK games industry.

Relief is available on qualifying design, production and testing costs, with qualifying expenditure capped at 80% of total core costs. Companies can claim a taxable expenditure credit worth 34% of qualifying expenditure, providing a net benefit of up to 25.5% after corporation tax.

Theatre Tax Relief (TTR) supports companies producing live theatrical performances, helping to reduce the cost of staging plays, musicals, operas and ballets.

Available to qualifying production companies, including charitable organisations, the relief provides either a reduction in corporation tax liability or a repayable tax credit.

Claims can be made on qualifying production and closing phase costs, with additional relief available on up to 80% of qualifying core expenditure. Tax credits are available at rates of 45% for touring productions and 40% for other qualifying productions, helping theatre companies reduce the cost of producing live performances.

Orchestra Tax Relief (OTR) helps orchestras and production companies offset the cost of delivering qualifying live concerts and performances.

Available to qualifying production companies, including charitable organisations, the relief provides either a reduction in corporation tax liability or a payable tax credit.

Claims can be made on qualifying production and closing phase costs, with additional relief available on up to 80% of qualifying core expenditure. The repayable credit is worth 45% of eligible losses, helping orchestras and production companies reduce the cost of staging qualifying concerts and performances.

Museums & Galleries Exhibition Tax Relief (MGETR) supports museums, galleries, libraries and archives in developing and delivering public exhibitions of cultural, artistic, historic and scientific interest.

The relief is available to eligible museums, galleries, libraries and archives with charitable or educational objectives, providing either a reduction in corporation tax liability or a repayable tax credit.

Claims can be made on qualifying exhibition production costs, with additional relief available on up to 80% of qualifying core expenditure. The repayable credit is worth 45% for touring exhibitions and 40% for other qualifying exhibitions, with a maximum credit of £100,000 for touring exhibitions and £80,000 for non-touring exhibitions.

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