AVEC Claims: A Step-by-Step Guide to Securing Your Credit

Successfully claiming the Audio-Visual Expenditure Credit (AVEC) requires careful attention to process and documentation. Receiving your entitlement is not something to be left to the last minute, as the process in itself takes many weeks and careful analysis.

The Claim Timeline

It takes a while to receive the benefit from an AVEC claim, predominantly due to the review timelines from BFI and HMRC.

A typical AVEC claim takes approximately 20 weeks, in our experience. Companies can expect the following timelines between beginning and end of the claim:

• 4 weeks: Budget and documentation preparation
• 12 weeks: BFI cultural test processing
• 4 weeks: HMRC claim processing

The first four weeks are needed to gather the documentation and budget in order to pass BFI’s Cultural Test. Following this, we can expect the largest chunk of time to go to waiting for BFI to process the Cultural Test results.

These steps must occur sequentially, as a certificate from BFI is a requirement for making a claim. Though this is a necessary step to be able to make the claim, but BFI’s timelines are far from predictable. They update their website regularly with the current expected timelines.

Essential Documentation

To be able to submit your claim, there are certain elements that are required and others that are recommended.

Basic Requirements

The following elements are crucial to make a valid claim:

• Corporation Tax Return (CT600)
• British cultural certificate from BFI
• Core expenditure statements (UK vs non-UK and per category)

You’ll need a correctly filled CT600. This is the main conduit for making a claim; everything else supports this claim.

The certificate from BFI is required to prove eligibility for the scheme. Official co-productions can forgo this requirement but will need to demonstrate that they meet those requirements.

Expenditure statements demonstrate that the costs you are claiming have been appropriately allocated. There should be two sets of analyses: one to demonstrate that the production meets the minimum UK spend requirement of 10% and that only the UK costs have been claimed; the other should demonstrate that only qualifying costs have been claimed.

Some claimants might also want to provide details of any methods of apportionment and/or assumptions made when calculating the claim’s value.

Additional Information Form (AIF)

Since April 2024, all claims must be accompanied by an Additional Information Form (AIF). The AIF must be submitted before the CT600, but this can be done on the same day.

The AIF is an anti-fraud measure and ensures that basic details about the claimant are collected and can be reviewed if needed. It requires the following information:

• VAT registration number
• PAYE reference
• Foreign Entertainer’s Unit (FEU) reference number, if applicable
• Production name
• Production start date
• Production status (ongoing, completed, abandoned)
• Total expenditure for all productions
• Total core costs for all productions
• Credit amount claimed via AVEC or other tax reliefs

Some companies must declare additional details. For example, companies with connected party costs must declare the transaction details, connected party names, transaction values and service descriptions.

Claim Calculation Method

The Audio-Visual Expenditure Credit is claimed on the cumulative costs of the production. This means that businesses are able to claim for the entire production in the completion period or can claim year-on-year. The deadline to make a claim is two years after the end of the accounting period you’re seeking to claim for.

For every period that you claim for, you must:

1. Calculate total production costs from the start
2. Subtract any previously claimed costs
3. Determine the claim amount for the current period (AVEC rate x qualifying costs)

Once the claim value has been worked out, you can then start to calculate how you’ll receive your benefit. Note that the credit is considered taxable income (taxed at 25%), therefore you will receive the net benefit.

The credit is initially used to pay off your Corporation Tax liability. Any leftover can then be used to pay off other tax liabilities or surrendered to other group companies. If you still have credit remaining after these steps, you’ll receive a cash credit from HMRC.

Want expert guidance through every step? Download our complete AVEC guide!

We’ve written a full guide to claiming the Audio-Visual Expenditure Credit, with details on qualifying productions, how to pass the BFI’s cultural test, calculating your credit and making your claim.

Download the eBook here.

Question still not answered? Get in touch with our experts! We’re happy to chat AVEC, VGEC or R&D tax credits.

With a 99.9% success rate, Myriad is your trusted guide for all things tax credits.