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From 1 April 2025, film and high-end TV companies will be able to claim additional tax relief on their UK visual effects costs. This will be delivered through the Audio-Visual Expenditure Credit (AVEC): companies will receive an enhanced 39% rate of AVEC (a 5 percentage point increase on the normal rate of 34%) on their UK visual effects costs. UK visual effects costs will be exempt from AVECs 80% cap on qualifying expenditure. Costs incurred from 1 January 2025 will be eligible for the additional tax relief.
These changes to AVEC will be legislated for in the next Finance Bill. The government expects the next Finance Bill to be published in full following the introduction of the Bill.
This will contain proposed legislation for the additional tax relief.
A consultation on the design of the additional tax relief ran from 27 March 2024 to 22 May 2024.