Corporation Tax Act 2009 section 1179CA

Amount of expenditure credit

Section 1179CA sets out the step-by-step method for calculating the amount of Audio-Visual Expenditure Credit (AVEC) that a qualifying company can claim for an accounting period in respect of a film, television programme, or video game.

• The calculation starts by totalling all relevant global production expenditure across all accounting periods up to and including the current one, then removing any expenditure that does not count as UK expenditure.
• UK expenditure is capped at 80% of total global expenditure — any excess above that cap is stripped out — giving a figure called "qualifying expenditure to date".
• From qualifying expenditure to date, the company deducts the qualifying expenditure to date from the last period in which it claimed a credit, leaving the "qualifying expenditure for the period".
• The credit is then calculated by applying the relevant statutory percentage rate to the qualifying expenditure for the period — with the applicable rate depending on whether the production is a film or television programme, or a video game.