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VFX Tax Credit

A guide to the VFX Uplift the UK’s enhanced 29% tax credit for visual effects.

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UK VFX Tax Uplift: How the AVEC Scheme Supercharges Visual Effects Budgets

The UK has introduced a dedicated incentive for film and high-end television projects with significant visual effects work. This VFX Tax Uplift, delivered through the Audio-Visual Expenditure Credit (AVEC), is designed to keep complex digital post-production in the UK.

Why the UK is the right location for VFX

The biggest financial hurdle for claiming large VFX costs has been removed. Under the new Audio-Visual Expenditure Credit (AVEC) system (effective January 1, 2025), productions benefit from two major enhancements:

  • Higher Effective Rebate: Qualifying UK VFX costs receive an enhanced rate, resulting in an effective benefit of 29.25% (a gross credit rate of 39%).
  • 100% Claimable: Crucially, the standard 80% cap on eligible UK expenditure does not apply to VFX costs. Projects can claim the uplift on 100% of their eligible UK VFX spend, regardless of the total budget or where the rest of the production took place.

This allows producers to carry out the most expensive digital work in the UK and get maximum financial relief on the entire bill.

What VFX costs qualify for the uplift?

The uplift applies to costs incurred for the use of computer technology to create or alter images, including:

  • Computer-Generated Imagery (CGI)
  • Compositing, 3D modelling, and animation
  • Costs associated with Generative AI (GenAI) used in the VFX pipeline.
  • VFX costs within Virtual Production setups.

Essential Requirements for the VFX Uplift

To access this enhanced credit, the project must meet the following criteria:

  1. UK Production Company: The project must be led by a UK company.
  2. British Certification: The project must be certified as culturally British by the British Film Institute (BFI)
  3. Work Location: The VFX work must be carried out by staff physically based in the UK.

The VFX Uplift is the UK’s commitment to attracting the world’s most advanced post-production work, making it the most financially advantageous place for visual effects budgets.

It should be noted that this does not apply to productions claiming Enhanced Avec (Independent Film Tax Credit) or Children’s TV and Animation Expenditure Credits.

If you have any questions or need advice on the VFX Uplift please do get in touch

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    David Gibbs | Alliotts

    David
    Gibbs

    Partner

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    David is an International Corporate Tax specialist. He has over 30 years’ experience in providing commercially focused tax advice and support to a wide range of clients, from technology start-ups to large inward investing corporates.

    A qualified Chartered Accountant, David went on to qualify as a Chartered Tax Adviser and prior to joining Alliotts as a partner in 2014 he held the position of tax partner in Grant Thornton and subsequently in PwC.

    David focuses on providing strategic tax advice to entrepreneurs and privately owned businesses. By investing time in understanding clients and their businesses he is able to provide advice which is practical and appropriate to clients’ circumstances in order to keep taxes to a sensible minimum. He advises on a wide range of taxes including transaction planning, UK outbound and inbound structuring, corporate tax, technology tax reliefs, investor and shareholder planning, capital gains tax and LLPs. David advises both UK and overseas business owners on international tax planning.

    David also specialises in advising individuals and businesses in the media sector on UK film tax credits, video games tax reliefs and other creative sector tax incentives. He also advises on EIS and SEIS.

     

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    Samuel Ampah | Alliotts

    Samuel
    Ampah

    Senior Manager, Media Team

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    Samuel is a key member of Alliotts Media team, working with production companies and helping produce their accounts. He regularly presents at third party webinars and workshops on a range of areas of interest to media businesses, ranging from tax incentives, accounting and growing a business.

    Samuel is a Trustee of Mama Youth Project and is a member of the Production Guild’s Diversity and Inclusion Group

    As a member of our accounts team Samuel also works with a wide range of UK based and international clients across a variety of sectors. Samuel’s primary role involves delivering accounting, management reporting, VAT and cash flow reporting services to clients. By working closely with Alliotts partners the information Sam provides helps clients ensure that they remain compliant with their filing deadlines and have the financial data they need to make key decisions.

    Testimonials

    “I’ve been lucky enough to have Sam over to the NFTS for 2 years running to speak on a Marketing, Distribution, Sales & Exhibition Masters. He is great at talking through the financing side of things – particularly given the lack of experience that most of our students have in the industry. He is able to break things down and explain them in a much clearer and straightforward manner. He is extremely personable and is always a hit with the students.”

    Poonam Sahota, National film and television school


    “Samuel Ampah and the team at Alliotts could not be more helpful. From the earliest stages of closing, Sam has been readily available to any and all advisors on the show to explain and reassure on the criteria and complexities of the UK film tax credit specific to the needs of the production, going so far as to create his own spreadsheets to verify the producer’s calculations and responding. to every related query by return. As the legislation and HMRC guidelines evolve, it’s reassuring to know Alliotts is in front of developments adding the weight and wisdom of an experienced team of advisors. That Ian Gibbon is a genuine cinephile and Sam enthusiastic about the project’s potential impact only enhances the engagement. Thank you.”

    Mary McGuckian, pembridge pictures.


    “Samuel is a safe pair of hands, with a robust and thorough understanding of all areas of accounting and finance relating to the film sector. He’s also a great speaker, with a knack for putting clients at ease, and explaining (sometimes complex) financial strategies and considerations in a way that is both concise and accessible.”

    Film City Futures