Additional tax relief for visual effects expenditure: A boost for the UK film industry
In the recent UK Budget, the government unveiled a significant enhancement to the tax relief available for the visual effects (VFX) sector. This move is set to provide a much-needed financial boost for VFX companies and stimulate further investment in the UK’s thriving film and television industries.
Under the new initiative, businesses involved in the creation of visual effects for film, TV and other screen productions will be eligible for enhanced tax relief on qualifying expenditure. This includes spending on activities such as CGI, animation and post-production work, which are integral to modern filmmaking. The enhanced relief aims to support the continued growth of the UK’s creative economy, ensuring that VFX companies remain competitive on the global stage.
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.
For businesses already benefiting from existing film tax credits, the new relief will be an attractive addition, providing greater cash flow and reducing overall tax burdens. It also opens up further opportunities for companies to reinvest in their operations, hire more talent and innovate within the industry.
The VFX tax relief is part of the government’s broader strategy to reinforce the UK’s position as a leading hub for film and media production. As the industry continues to adapt to new technologies and trends, this targeted support is an important step in securing a strong and sustainable future for visual effects businesses.
If your company is involved in visual effects production, it’s worth consulting with a tax advisor to understand the full scope of this relief and how to claim it. As experts in film and creative sector tax credits, we’re here to help you navigate these changes and maximise the financial benefits available to your business. For more information email us at info@streetsmedia.co.uk
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