What is Theatre Tax Relief and who qualifies?

Theatre Tax Relief (TTR) is a generous relief, which was introduced on 1 September 2014 to recognise the cultural and economic significance of theatres in the UK. The Government hopes the relief will encourage and support UK theatre producers.

TTR is available to any business within the charge to corporation tax, including not for profit organisations such as charities. To qualify, the business must carry on a qualifying theatrical production. In general terms, productions of a play, an opera, a musical, a ballet or other dramatic piece would qualify for TTR.

You can download our Comment On Theatre Tax Relief here (pdf).

How does Theatre Tax Relief work?

TTR is applied to each qualifying production, giving businesses potential tax relief for every theatrical production undertaken during the financial year. Tax relief is given according to the productions’ qualifying expenditure which is, broadly speaking, the production and closing costs.

Tax relief comes in the following forms:

  • An additional deduction for corporation tax purposes amounting in most cases to 80% of all qualifying expenditure.
  • If there is a loss on production after the additional deduction has been taken, the business has the opportunity to surrender this loss for a tax credit equal to 20% of the surrenderable loss for a non-touring production or 25% of the surrenderable loss for a touring production.

Example

Income £400,000
Expenditure (£450,000)
Loss before relief £50,000
Enhanced expenditure (80% x £200,000) £160,000
Loss after relief £210,000

Loss available for surrender

Lower of:

Available loss of £210,000 and

Enhanced expenditure of £160,000

 

 

£160,000

Tax credit payable at 20% £32,000

If you would like to find out how you can make a TTR claim, please contact Catriona Finnie at charities@chiene.co.uk

We are also able to help with other creative sector tax reliefs: orchestra, computer games, films,  certain television and animation productions, and (from 2017) museums and galleries all qualify for tax relief. Contact us for advice and support.