1 – Updated guidance from HMRC on AVEC:
On 20 March 2026, HMRC made various updates to its Creative Industries Expenditure Credit Manual:
4 Month Rule. HMRC has clarified its interpretation of when qualifying expenditure must be paid.
i. Previously, qualifying expenditure could be included in an AVEC claim if the expenditure was due to be paid within four months of the production company’s year-end, regardless of when the AVEC claim was submitted.
ii. HMRC’s latest guidance now says that if an AVEC claim is to be submitted within four months of the company’s year-end, any expenditure included must have been paid out by the time that the AVEC claim is submitted.
iii. This will impact producers submitting claims for planned expenditure not yet incurred.
Eligible Expenditure. HMRC simplified the rules regarding the qualification of flight costs as qualifying expenditure.
i. Previously, the treatment of flights was tied to the activity of the traveller rather than just the origin and destination of the flight. If a traveller was working on arrival, the flight was assessed based on the destination, if the destination was the UK then it was qualifying. If the person was not working on arrival i.e. they were returning home after working, the location of where the work had actually taken place governed the qualification for the entire return journey.
ii. A flight will now be deemed qualifying if it starts or ends in the UK but it will be assessed on a leg-by-leg basis, for multi-stop journey, only the leg(s) to or from the UK will count as qualifying.
CT600P Form. HMRC has updated its “how to claim” guidance to make the submission of a CT600P Creative Industries supplementary page mandatory for all claims submitted after 6 April 2026. The form must be included with the Company Tax Return.
Group Company Surrenders. Whilst first announced in the Autumn Budget of 2025, HMRC has now updated its guidance to include a section clarifying that payments made between group companies in exchange for surrendering AVEC are ignored for Corporation Tax purposes. They are treated as tax neutral, acting as neither taxable income nor a deductible expense, provided that the payment does not exceed the credit surrendered.
2 – The UK Global Screen Fund outlines Minimum Guarantee Strand and Support for Majority Co-Productions in Documentary and Animation:
Denitsa Yordanova, head of the UK Global Screen Fund held an online townhall meeting on 26 March and pledged the GSF’s support for UK sales agents.
While specifics are still to come, the GSF propose to assist sales agents in paying minimum guarantees to secure international rights for UK films. It is proposed that recipients will have access to an allocation of funding for a period of 12 months which it can use towards presale minimum guarantees or in respect of completed films. A supported sales agent will need to at least match the support provided on a particular project themselves but the sales agent will be able to choose which projects to allocate the funding towards, provided that the proposed projects meet an eligibility criteria.
Yordanova also spoke about the new majority co-production award being piloted. Details are scarce but the award will initially only be open to support animation and documentary feature films.
3 – Industry Updates from CinemaCon
This year’s CinemaCon took place from 13-16 April in Las Vegas and signalled a reinvigoration of the theatrical industry with several key industry takeaways:
i. David Ellison stated that should the Paramount/Warner Bros merger take place, he was committed to a minimum 45-day theatrical release window on every feature film Paramount/Warner Bros put out. Universal Pictures also reaffirmed its commitment to an exclusive 45-day window. Ellison also said that Paramount/Warner Bros would be creating a minimum of 30 feature films per year. Also at the event, Amazon MGM unveiled its plans for the next two years, including a plan to release at least 15 films theatrically every year. Amazon has further backed up its theatrical focus by extending the Project Hail Mary window to maximise its currently USD550million box office haul and a planned USD1 billion annual spend on theatrical films.
ii. Disney officially launched Infinity Vision, a Premium Large Format certification to rival IMAX screens which are increasingly booked by its competitors. To be certified, exhibition venues must include a minimum 50-foot screen width, 4k laser projection and immersive spatial audio. The format will pilot on 25 September 2026 with a rerelease of Avengers: Endgame featuring never-before-seen-footage. Over 75 US and 300 international theatres have also received.
iii. Warner Bros. Pictures announced its new specialty film label, Clockwork and unveiled its first acquisition, Anora director Sean Baker’s TI AMO! Clockwork will be led by Christian Parkes, formerly of NEON.
iv. Ahead of CinemaCon, 2025 start-up distributor, Row K, withdrew its scheduled appearance at the event amid the departure of several top executives.
4 – Studios and WGA reach tentative new deal
The WGA and the Alliance of Motion Picture and Television Producers have each confirmed that a tentative agreement has been reached for the 2026 Minimum Basic Agreement. Members of the East and West chapters of the WGA ratified the new contract with 90.38% voting in favour. The 2026 agreement includes increases to minimums, foreign and domestic residuals and the viewership-based streaming bonus.
In terms of AI protection – which was a key negotiation point for the WGA – the protections from the 2023 Agreement will remain with additional requirements that must be met if a studio seeks to use scripts as training date for generative AI. The new agreement will also include increases to health contribution caps and a 3.25% increase in the health contribution rate.
SAG-AFTRA and DGA renegotiations are tabled for May. Both current SAG-AFTRA and DGA contracts expire on 30 June.
5 – World AI Film Festival takes place in Cannes
April saw Cannes hosting the World AI Film Festival for the first time.
The festival showcased films, shorts, advertising content and micro-series created using at least three distinctive generative AI tools, including one for image creation.
The festival highlighted the ever-evolving technology with the festival’s artistic director remarking that the top projects from last year’s festival (held in Nice) wouldn’t even make the official selection this year given the evolution of AI tools. WAIFF fielded over 7000 submissions, up from 1,500 the year before and announced its development of an online distribution platform dubbed “Netflix for AI films”.
Written by Sarah Cundall. Find out more about our expertise in Film & Television.
