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Qualify for the AVEC, VGEC or other creative tax reliefs with our guide to BFI’s Cultural Test & key steps.
Navigating the world of tax credits in the creative industries can feel a little overwhelming, especially when it comes to understanding specific requirements like the BFI’s Cultural Test. But if you’re looking to qualify for the Audio-Visual Expenditure Credit (AVEC), the Video Games Expenditure Credit (VGEC) or some of the other creative tax reliefs being phased out getting familiar with this test is absolutely essential.
There are some basic requirements to be eligible for AVEC and VGEC, no matter the type of production. Eligible productions and games must:
There are some additional requirements for some TV programmes, films and games, but you’ll notice a key criterion for all productions is that “British” certification.
To make a claim, you must have a certificate from BFI. A letter of comfort will not be enough. The certificate can be “interim” (for productions not yet completed) or “final” (for completed productions). An interim certificate is valid for three years and there is no limit on the number of interim certificates you can receive.
The only exception to this rule is official co-productions, who qualify as "British" without the Cultural Test, but must provide evidence of their status otherwise.
The application for a BFI certificate is made online but requires some documents to be submitted alongside. These documents are:
The statutory declaration and accountant's report can take extra time to gather, as third parties are needed (a notary and accountant, respectively) to meet these requirements.
BFI can take up to 12 weeks to review your application and provide a certificate, so it’s best practice to get your application in as soon as possible.
The cultural test operates on a points-based system where productions need to get 18 out of a possible 35 points to qualify (or 16 out of 31 for animations).
The test is divided into four key sections:
Up to 18 points (or 16 for animation) are available in this section. It examines your production's on-screen representation through four key areas:
You can get up to 4 points for the content being set in the UK or the EEA, depending on the proportion of the production that is set there. For animations, points can even be awarded for undetermined locations (like space or fantasy settings).
Up to 4 points are also available depending on the proportion of lead characters from the UK or EEA.
You can claim 4 points if the production depicts a story relating to Britain or to another EEA state or if the story is by a British/EEA citizen.
6 points (or 4 for animations) are available depending on the proportion of the production that is in English or in a recognised UK language (Gaelic, Scots, Welsh…).
This section awards a maximum of 4 points based on British creativity, heritage and cultural diversity.
One or two points can be gained in each of these areas, depending on if the production excels in this area.
Up to 5 points (or 3 for animations and video games) are up for grabs depending on the location of the principal photography, SFX, VFX and music recording. A majority of the work being done in the UK can get you 2 points and over 80% can get you an extra 2 points.
Claimants can access up to 8 points awarded for UK/EEA nationality or residence of the key personnel in the production. The nationality or residence of the director, scriptwriter, producer, composer, lead actors, the majority of the cast, other heads of department and the majority of the crew can get you a point on each count.
It may seem like companies can make a production in the English language, with a team of European staff and complete a portion of their filming the UK and get their points. However, BFI’s “golden rule” prevents companies from qualifying without emphasis on creative content.
To pass, the production must also score at least two points in section A1 (setting) and/or at least two points in section A2 (characters), and/or 4 points in section A3 (story). This can be complex, so it’s best to get in touch with the experts at Myriad if you’re not sure if you’ve passed this rule.
Another rule, the “Undetermined Points Rule”, applies to animations with an undetermined location or characters with undetermined nationality. The animation can claim points in Section A1 (location) and/or Section A2 (lead characters), but only if the animation is awarded at least one point in any of Sections A3 (story), A4 (dialogue) or B (Cultural Contribution).
At Myriad, we always advise our clients to refrain from going beyond the ceiling when it comes to points. Trying to prove beyond 18 (or 16) points creates unnecessary work that will not pay back any extra benefit.
We also advise claimants to focus on sections A and B where possible, as these don’t require proof from an accountant’s report.
We’ve written a full guide to claiming the various creative tax reliefs, with details on qualifying productions, how to pass the BFI’s cultural test, calculating your credit and making your claim.
Check out our eBooks here.
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