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Theatre Tax Relief Guide

| Graeme Hills | 17 April 2024

The government first introduced Theatre Tax Relief (TTR) in 2014 to support and encourage the creation of theatrical productions and there are still many eligible companies missing out on this valuable tax relief. In the Spring Budget 2024, the Chancellor confirmed that this relief would be made available on a permanent basis to support the sector. My colleagues Jody McNichol and Chris Pratt have produced this concise guide to the relief.

What is Theatre Tax Relief?

TTR is a special relief available to companies who produce theatrical productions for live performances whether for the general public or for educational purposes.

A company can claim an enhanced deduction against its taxable profits for costs which are classed as “core expenditure”. From 1 September 2014, a total deduction of 180% of the eligible costs is available representing a minimum corporation tax reduction of £34.20 for every £100 of qualifying expenditure.

Where the enhanced deduction creates a tax loss, the company can surrender the loss for a cash payout. The surrendered loss can generate a cash payout of either 45% for a touring production or 40% for all other productions.

According to HMRC statistics, £55 million was paid out in 2021-22 in relation to 725 claims. Of those claims, 65 claims (9%) resulted in relief of over £250,000.

A recent claim prepared by Duncan & Toplis has seen a credit received of around £241,000.

Who can make a claim for Theatre Tax Relief?

The relief is only available to companies, this includes charitable companies and community interest companies (CIC).

The definition of Theatrical Production is quite wide and includes plays, operas, dramas, musicals, and ballets.

The company must be overall responsible for the production including producing, running and closing, and be involved in artistic and creative decision-making.
From 1 April 2024, the rule for core expenditure on goods or services provided from within the UK or European Economic Area (EEA) has changed. At least 10% of the core expenditure must relate to activities in the UK.

Also from 1 April 2024, all claims will need to be submitted with an additional information form. The form requires you to provide the necessary evidence to support your claim.

What is “core expenditure”?

This is a term used by HMRC to relate to certain aspects of production costs. Ensuring that these costs can be easily recognised and identified ensures that any claim can be maximised and substantiated.

How do you make a claim for Theatre Tax Relief?

A company claims TTR by making the necessary disclosures within the Corporation Tax Return. The return will then be reviewed by HMRC’s specialist unit, the Creative Industries Unit.

You can make a claim for TTR up to one year after the company’s filing date. For accounting periods beginning on or after 1 April 2024, you can make a claim up to two years after the end of the period the claim relates to.

Obtaining the right tax relief for Theatrical Production companies can be best achieved if professional advice is sought at an early stage. Our dedicated team of tax advisers can prepare your TTR claim and aid submission and acceptance by HMRC. To find out more get in touch with our team of experts today.


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