How can theatre production companies benefit from tax relief

The relief is designed to recognise the unique cultural value theatre brings to the UK, and encourage more theatrical productions.

Who can make a tax relief claim?

To qualify for TTR you must be responsible for all of the following:
  • producing, running and closing the production;
  • actively engaging in decision-making during the production, running and closing phases;
  • making effective creative, technical and artistic contributions to the production;
  • directly negotiating, contracting and paying for rights, goods and services in relation to the production.
Not-for-profit organisations such as charities as well as community interest companies can also claim TTR if they are responsible for the production of a theatrical performance.

All production companies can make a claim whether they are touring or non-touring.

The tax benefit

Where a theatrical production company is profitable, the TTR claim reduces its tax liability by up to an additional 15.2% of the qualifying production costs.
 
Where a company is loss-making or doesn’t pay corporation tax (for example, due to prior year losses, or if a charity), a tax credit at a rate of up to 16% (20% for touring productions) of the qualifying costs is repayable to the company.

What theatrical productions are eligible for tax relief?

A qualifying production must meet the following three conditions:
  • it is a theatrical production (i.e. a ballet, play, opera, musical or other dramatic piece);
  • the production must be intended to be performed live to paying members of the general public or provided for educational purposes;
  • at least 25% of the ‘core expenditure’ on the production must be spent on goods or services that are provided from within the European Economic Area (EEA).
What type of costs can qualify?

Qualifying costs include the core expenditure on activities involved in:
  • producing the production, i.e. before the performance is open to the public;
  • closing the production, i.e. after the running of the live performances;
  • exceptional running costs for example the cost of a substantial recasting or a substantial redesign of the set.
Expenditure may not qualify on:
  • developing the production;
  • non-producing activities, for example financing, marketing, legal services and storage costs;
  • the ordinary running activities;
  • the exploitation of the production.
How we can help

Our specialist team can assist you to structure your entity to ensure that it qualifies for relief, consider which of your theatrical productions qualify, identify the costs that are eligible for relief and manage the application process on your behalf.

If you require any advice on the matters noted above, please contact Philip Clark.
 

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