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07 January 2025 | DCW Accounting Ltd

Additional tax relief for visual effects expenditure

Creative industry tax reliefs (CITR) are a collection of Corporation Tax reliefs that allow qualifying companies to claim a larger deduction, or in some circumstances claim a payable tax credit when calculating their taxable profits.

CITR includes the following reliefs:

• Film Tax Relief
• Animation Tax Relief
• High-end Television Tax Relief
• Video Games Tax Relief
• Children’s Television Tax Relief
• Theatre Tax Relief
• Orchestra Tax Relief
• Museums and Galleries Exhibition Tax Relief

An additional tax relief for film and high-end TV companies was announced as part of the recent Budget measures. From 1 April 2025, companies will be able to claim an enhanced 39% (increased from 34%) rate of Audio-Visual

Expenditure Credit (AVEC) on their UK visual effects (VFX) costs. UK VFX costs will be exempt from the AVEC’s 80% cap on qualifying expenditure. Qualifying expenditure incurred on or after 1 January 2025 will be eligible.

To protect the additional tax relief from misuse, companies claiming the relief for VFX costs will need to provide further evidence to verify these expenses.



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