Corporation Tax Act 2009 section 1179EC

Special credit for visual effects

Section 1179EC provides an enhanced audiovisual expenditure credit (AVEC) for qualifying films and television programmes that incur UK expenditure on visual effects (VFX) work, offering a higher rate of 39% on that VFX spend compared to the standard credit rate.

• Production companies can claim an additional AVEC at 39% on qualifying UK visual effects expenditure incurred on a qualifying film or television programme, available from the completion period onwards.
• The additional credit is reduced by the portion of any standard Chapter 3 credits already claimed that relate to visual effects expenditure, calculated through a six-step process that takes account of the 80% expenditure cap.
• Relevant visual effects expenditure means UK expenditure on work using computer technology to create or alter images for the film or programme, provided that work is carried out in the United Kingdom and qualifies as relevant production expenditure.
• The Treasury has the power to amend both the 39% VFX credit rate and the multiplier used in the calculation of the adjusted VFX portion by regulations.

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