BFI guidance on Enhanced Audio-Visual Expenditure Credit (IFTC)

The British Film Institute (BFI) has released further details for companies applying for certification for the Enhanced Audio-Visual Expenditure Credit (Enhanced AVEC), also referred to as the UK Independent Film Tax Credit or IFTC. The BFI is now able to accept applications for the Enhanced AVEC.

If you have not yet applied

Any applications being made after 30 October 2024 will need to state at the start of the application whether it is an application for Standard AVEC or Enhanced AVEC (IFTC). The additional criteria will then appear as part of the form if Enhanced AVEC (IFTC) is chosen.  An application can be made here by selecting the ‘Upgrade to Enhanced AVEC’ application form.

If you have already received your interim certificate

Applicants that have already received a standard AVEC Interim Certificate will be invited to submit the additional evidence needed to apply for the Enhanced AVEC. The BFI is reviewing applications that meet the core expenditure threshold and will be emailing applicants.

If you have applied but not yet received your certificate

The BFI will be reviewing previously submitted applications that meet the core expenditure threshold and have not yet been assigned. The BFI will send these applicants an email to ask if they wish to un-submit their current application so they can complete the additional criteria.

If you have not received an email, we suggest you contact the BFI.

Note that companies that have already applied will have six months from 30 October 2024 to upgrade their standard AVEC certificate to an enhanced AVEC certificate.

Key requirements:

1. Meet the pre-existing conditions of AVEC
2. A film must have begun principal photography on or after 1 April 2024
3. The project must not have a total core expenditure (UK and non-UK) of more than £23.5 million
4. The project will need to meet the creative connection condition of having a lead UK scriptwriter or lead UK director
5. If your film qualifies as an official co-production, it only needs to meet the core expenditure condition
6. Companies will be able to claim the enhanced AVEC from HMRC from 1 April 2025, for costs incurred from 1 April 2024
7. Companies can only claim the Enhanced AVEC up to a maximum of 80% of £15 million of the UK qualifying core expenditure
8. The film must be intended for theatrical release.

Key change to the application process:

An accountant’s report at both the interim and final application stages will now be required. However, an interim application is not mandatory. This will be in addition to the accountant’s report at the final certification stage (where claiming C and/or D points) that is already required.

The accountant’s report will need to verify:

1. The project meets the core expenditure limit and does not exceed the maximum of £23.5 million, and
2. The creative connections condition being the director or scriptwriter is a British citizen or UK resident, or
3. The film is a qualifying co-production (if applicable).

What accountants will be expected to do:

1. Carry out due diligence on the budgetary information and final cost report (which may involve reviewing finance plans, cashflows and financing contracts)
2. Review evidence of the nationality or residence of the director or scriptwriter
3. Review evidence of, where there is more than one director or scriptwriter, why they are considered as one of the lead directors or scriptwriters
4. Review of directors or scriptwriters’ contracts, agreements and chain of title.

The BFI guidance also outlines further information on the requirement to apply for final certification if interim certification has been made.

The guidance can be found on the BFI website at this link: Apply for British certification and tax relief | BFI

Please get in touch with your Saffery partner if you need further advice or information on the new BFI guidance.