What is Good Value for an AVEC Adviser?

The Audio-Visual Expenditure Credit (AVEC) is a UK tax incentive designed to support film and high-end television production. It offers a significant cash rebate, which is a valuable financial tool for both independent and established studios, but making your claim can be a challenging endeavour, requiring you to meet both BFI and HMRC’s standards.

Many companies choose to enlist the support of a professional tax adviser when making their claim. Professional advisers have all the knowledge and experience in making AVEC claims and can help you make the most out of your production while minimising your own time investment.

But here's the challenge: understanding what constitutes "good value" when making an AVEC claim isn't always straightforward. It's about ensuring that every pound spent on preparing and submitting your claim translates into meaningful returns.

How Is the Audio-Visual Expenditure Credit Calculated?

The Audio-Visual Expenditure Credit offers a 34% tax credit on qualifying UK expenditure for film and high-end television productions. To qualify, your production must pass the BFI cultural test, demonstrating sufficient UK cultural content, and at least 10% of the total core production costs must be UK expenditure.

Understanding what qualifies is crucial because the structure distinguishes between core expenditure (costs directly related to producing the programme) and non-core expenditure (such as marketing or distribution costs). Only core expenditure counts toward your claim, and proper categorisation is essential for both maximising your credit and ensuring HMRC compliance.

What Constitutes "Good Value" in Your Claim

Good value for a claim fundamentally means spending an appropriate amount of time or money on preparing your submission so that the amount you receive back is genuinely worth the effort and resources invested.

Your idea of good value may not be the same as the next production company; one may choose to pursue a professional adviser for peace of mind, while the other goes down the DIY route to save costs.

However, they both start with ensuring your claim is optimised and delivered efficiently. Knowing the AVEC claim rates is only half the battle.

The first step to good value is ensuring you capture every eligible pound. This might include overlooked post-production costs, VFX work performed in the UK, or properly apportioned costs for dual-purpose activities. A thorough review of your production budget against HMRC and BFI guidelines can reveal additional qualifying expenditure you hadn't considered.

Production companies sometimes structure their claims in ways that inadvertently trap losses or prevent them from utilising credits effectively. Getting expert guidance on structuring before you're too far into production can prevent costly mistakes that diminish the real value of your claim, even if the calculated credit amount looks impressive on paper.

Good Value in Consultant Fees: What to Expect

When evaluating advisers, understanding industry-standard fee structures helps you identify fair pricing and spot potential red flags.

Consultants typically structure their fees in one of four ways:

Percentage fees ranging from 15-25% of your claim value are common in the market. These scale with the size of your credit, meaning a bigger claim equals a bigger fee for the adviser, which aligns their incentives with yours. However, on larger productions, percentage fees can become substantial.

Time-based billing varies significantly by firm type. Small accountancy practices might charge £125-£250 per hour, mid-tier firms typically range from £250-£450 per hour, and large global firms can command £400-£750 per hour or more. While this provides transparency on hours worked, it can create unpredictable costs if your claim proves more complex than anticipated.

Fixed project fees typically range from £10,000 to £50,000 or more, depending on production size and complexity. These offer upfront cost certainty and incentivise efficiency, though key services like HMRC enquiry defence may be excluded from the base fee.

Minimum fees of £4,000-£10,000 are standard across most firms, even for smaller or single-production claims. This can make modest projects uneconomical with external advisers, suggesting a DIY approach or simplified service package might be more appropriate.

What Should Be Included in Baseline Services

At minimum, an adviser should provide eligibility assessment and financial analysis. This means reviewing your production to determine whether it qualifies for AVEC, analysing your budget to identify qualifying expenditure, and categorising costs in line with HMRC and BFI requirements.

These baseline services form the foundation of any claim and should be clearly defined in your engagement letter.

Add-Ons: Pay or DIY?

Several additional services might be offered as add-ons, and you'll need to decide whether to pay for them or handle them in-house:

HMRC enquiry defense coverage is sometimes charged separately. If HMRC questions your claim, having professional representation can be invaluable. Consider whether this is included in your base fee or will cost extra if needed.

BFI support varies by adviser. Some firms will handle your entire BFI certification processf, while others expect you to manage this directly. If your team lacks experience with BFI applications, paying for this expertise might be worthwhile.

Submission preparation, including completing the Additional Information Form and CT600, might be included or offered as an additional service. Assess your internal capabilities honestly before deciding whether to pay for this support. Your accountant may also be able to handle this step for you.

Red Flags to Watch For

Be wary of fees that aren't aligned with claim complexity or value delivered. An adviser charging 25% on a straightforward £100,000 claim (£25,000 in fees) should be delivering exceptional, comprehensive service, not just filling out forms.

Similarly, watch for firms that quote attractively low base fees but nickel-and-dime you with expensive add-ons for basic services. Hidden costs can quickly erode what initially seemed like good value.

Getting the Service You Need

Part of the search for a suitable adviser means working out what you are confident in handling and what you’d prefer to outsource. If your team has time, your internal resources can be spent learning and preparing your claim, which is a skill that remains useful for future claims.

How Do I Balance Adviser Costs with Claim Value?

Choosing the right approach to your AVEC claim requires balancing adviser costs against claim optimisation while managing risk appropriately.

If engaging an adviser costs £25,000 but they identify an additional £150,000 in qualifying expenditure you'd have missed, that's excellent value. Conversely, if you're paying £40,000 for services you could have handled internally with modest training, you're overpaying.

The key is honest assessment of your internal capabilities, the complexity of your production, and the stakes involved. Larger, more complex productions generally justify professional support. Smaller, straightforward claims might not.

Questions to Ask Potential Consultants

Before engaging an adviser, get clear answers to these essential questions:

1. Do they have a clear fee structure and scope of service? Vague answers or reluctance to commit to writing should raise concerns. You need transparency on what you're paying for and what's excluded.
2. What happens if your claim is rejected? Understanding who bears the risk and what recourse you have protects you from paying for unsuccessful claims.
3. Do they handle compliance checks? Is it included? HMRC enquiries can happen. Knowing whether support is included or will cost thousands extra is crucial for budgeting.
4. How long have they been operating? Experience with AVEC and its predecessor reliefs matters. Advisers who've been in the market for several years bring valuable perspective and established HMRC relationships.
5. Can they show positive reviews and case studies? Social proof matters. Firms should be able to demonstrate successful claims and satisfied clients in your sector.
6. Do they have more tax professionals than salespeople on their team? This ratio tells you where a firm's priorities lie. You want deep expertise, not aggressive marketing.
7. Are they accredited by chartered organisations (ACCA, CIMA, ATT…)? Professional accreditation demonstrates commitment to ethical standards and continuing professional development.
8. Do they follow anti-money laundering procedures? Legitimate firms conduct proper due diligence on clients. If they don't, that's a serious red flag suggesting potential compliance issues.

Getting the Best Value for Your Claim

Good value for an Audio-Visual Expenditure Credit claim means maximising your legitimate claim while minimising risk and advisory costs. It's about smart investment, not just minimising expenses.

Wasted money or time on improperly structured claims, missed deadlines, or incomplete documentation represents opportunity cost you'll never recover. Compliance issues can result in claim rejection, requiring you to repay credits you've already received, plus interest. Getting it right the first time is almost always cheaper than fixing mistakes later.

The right adviser investment pays for itself through comprehensive claim optimisation, reduced compliance risk, and protection during HMRC reviews. However, this path isn't necessarily right for everyone. Productions with experienced finance teams and straightforward structures might handle claims internally with excellent results.

Whether you handle your AVEC claim in-house or with a consultant, these principles will help you maximise value while minimising risk. If you'd like us to review your production's eligibility or discuss your options, get in touch.