Specialist accountants for film and television production companies, producers and production services businesses. TaxDigit is a firm of chartered certified accountants and international tax advisors in Guildford, working with UK production companies, co-producers and freelance crew across film, high-end television, animation and children's TV.
Production finance has its own grammar: a special purpose vehicle per title, a financing plan that only closes once the expenditure credit is priced in, cost reports the financiers actually read, and a PAYE position that changes with every engagement. We handle all of it, and we tell you the number before you commit to the schedule, not after.
The expenditure credits that fund UK production
The old creative sector reliefs have been replaced by expenditure credits. Getting the claim right is now the single largest line of non-recouped funding in most UK production budgets.
Audio-Visual Expenditure Credit (AVEC)
AVEC is claimed by the production company on its qualifying UK expenditure, capped at 80% of core expenditure.
- Film and high-end television — 34% headline credit, worth about 25.5% of qualifying spend after corporation tax.
- Animation and children's television — 39% headline credit, worth about 29.25% after corporation tax.
- Certification — the production must pass the cultural test and hold a British certificate from the BFI, interim during production and final on delivery.
Independent Film Tax Credit (IFTC)
Independent British films can claim an enhanced 53% AVEC rate — roughly 39.75% net of corporation tax. The credit is available where core expenditure is no more than £23.5m, with the credit computed on the first £15m of qualifying spend. Principal photography must have begun on or after 1 April 2024, and claims have been payable since 1 April 2025. A separate BFI certificate applies.
The visual effects uplift
UK visual effects costs attract a 39% credit rather than 34%, and — uniquely — VFX costs sit outside the 80% cap. The uplift took effect from 1 April 2025 for qualifying costs incurred from 1 January 2025. It cannot be combined with the Independent Film Tax Credit on the same production.
Video Games Expenditure Credit
Games development is claimed under VGEC at 34%. We cover it in full on our video games accountants page.
The transition deadline nobody should miss
Film Tax Relief, High-End Television Tax Relief, Animation Tax Relief, Children's Television Tax Relief and Video Games Tax Relief closed to new productions from 1 April 2025. Productions already in the old regime can continue under it, but the legacy reliefs end entirely from 1 April 2027. If you have a title still running on the old basis, the modelling — old relief versus AVEC, and the cash timing of each — needs doing now.
| Credit | Headline rate | Approx. net benefit | Cap on qualifying spend |
|---|---|---|---|
| AVEC — film and high-end TV | 34% | 25.5% | 80% of core expenditure |
| AVEC — animation and children's TV | 39% | 29.25% | 80% of core expenditure |
| Independent Film Tax Credit | 53% | 39.75% | Credit on the first £15m; budget up to £23.5m |
| UK visual effects costs | 39% | 29.25% | No 80% cap on qualifying VFX |
| Video Games Expenditure Credit | 34% | 25.5% | 80% of core expenditure |
Production company accounting, done properly
- SPV set-up per title — incorporation, group structure, intercompany agreements and the separate-trade requirement the credit depends on.
- Cost reporting — budget to actual, estimate to complete, and the cost statements financiers, broadcasters and completion guarantors expect.
- Cash flow to claim — modelling when the credit lands against when the production spends, including interim claims on long shoots.
- Statutory accounts and audit-ready records — production accounts prepared so the claim survives an HMRC enquiry.
- VAT — registration, recovery on pre-production spend, cross-border services and place-of-supply on international co-productions.
- Co-productions and overseas structures — treaty co-pros, foreign branches, transfer pricing and double tax relief, handled by our international advisory team.
Cast, crew and payroll
Off-payroll working (IR35)
Where crew work through personal service companies, the production company is usually the end client and has to determine status and, if inside the rules, operate PAYE as deemed employer. Since April 2024 HMRC can offset tax the worker and their company have already paid against a deemed employer's liability, which materially changes the cost of getting it wrong. We run status determinations, the disagreement process and the deemed-employer payroll.
Short engagements
HMRC's employment status guidance allows an NI-only payroll treatment for certain engagements of seven days or fewer where the worker does not meet the self-employment tests. Applied correctly it saves real money on daily crew; applied loosely it creates a PAYE exposure across the whole schedule.
Overseas cast and crew
Payments to non-resident performers for UK work are subject to withholding at source under the rules operated by HMRC's Foreign Entertainers Unit, with a reduced-rate application available in advance. For internationally mobile employees, the old section 690 direction process was replaced by an employer notification from 6 April 2025. Both are covered on our non-resident entertainers tax page.
Who we act for
- Independent film and high-end TV production companies, and their per-title SPVs
- Animation and children's content studios
- Production services and facilities companies, post houses and VFX vendors
- Producers, line producers and production accountants needing a second pair of eyes
- Freelance crew — directors of photography, editors, sound and art department — trading as sole traders or through limited companies
Film and TV sits inside our wider media, entertainment and creative industries practice, alongside music, theatre and orchestra, actors and entertainers and creative agencies and studios.
Frequently asked questions
What is the Audio-Visual Expenditure Credit worth in cash?
For film and high-end TV the credit is 34% of qualifying UK expenditure, worth about 25.5% of that spend once corporation tax on the credit is taken into account. For animation and children’s television the rate is 39%, worth about 29.25%. Qualifying expenditure is capped at 80% of core expenditure.
Do we qualify for the Independent Film Tax Credit?
IFTC gives an enhanced 53% credit — around 39.75% net — for qualifying independent British films with core expenditure of no more than £23.5m, with the credit calculated on the first £15m. Principal photography must have started on or after 1 April 2024 and the film needs the relevant BFI certificate. A production claiming IFTC cannot also take the visual effects uplift.
When do the old film and TV tax reliefs stop?
Film Tax Relief, High-End TV, Animation and Children’s TV Tax Relief closed to new productions from 1 April 2025. Productions already claiming can continue, but the legacy reliefs end completely from 1 April 2027, so any title still on the old basis needs a transition plan.
How does the visual effects uplift work?
Qualifying UK visual effects expenditure attracts a 39% credit instead of 34%, and those VFX costs are not restricted by the 80% cap that applies to other qualifying expenditure. It applies from 1 April 2025 for costs incurred from 1 January 2025.
Do we need a separate company for each production?
Almost always, yes. The expenditure credit is claimed by the production company responsible for the production, which treats it as a separate trade. A per-title SPV keeps the claim clean, keeps financiers comfortable and ring-fences risk. We set these up and run them.
How should crew be paid — PAYE, self-employed or through a company?
It depends on the engagement, not on custom. Some roles are genuinely self-employed under HMRC’s employment status tests, some short engagements can go through payroll on an NI-only basis, and anyone supplying services through their own company brings the off-payroll working rules into play with the production company as end client. We assess each role and run the payroll that follows.
Can you take over mid-production?
Yes. We regularly pick up productions that are already shooting, reconcile the cost report, rebuild the claim position and take over payroll from the next period.
Where are you based?
Our office is at Parallel House, 32 London Road, Guildford GU1 2AB — close to the Surrey production corridor and around 35 minutes from central London. We act for production companies across the UK and internationally.
Ready to fund your next production properly?
Talk to a chartered certified accountant who understands AVEC, cost reports and crew payroll.
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