Theatre Tax Relief was introduced on 1 September 2014. This allows eligible production companies to claim back cash repayments on qualifying expenditure on producing theatrical productions.
In order to qualify you have to be a production company. By definition, that means you are within the charge to corporation tax. So, if you’re an individual, a trust, a partnership, or an unincorporated association, you won’t be able to qualify.
Charities often think that they will not be able to claim the relief because they don’t pay corporation tax, however, charities are within the charge to corporation tax, but most of their income will be exempt. So, if you are a charity that is limited by guarantee, you will be able to make a claim.
What costs qualify for Theatre Tax Relief?
There are various phases to putting on a theatre production. The first phase is when you are considering whether or not you will go ahead with the production. Once the decision has been made to proceed, you then go into phase two, the production phase, i.e., casting, rehearsals, costume design. The third phase is when the production is running, and performances are being shown to the public. The fourth phase is when you are closing the production and striking the set.
There are four stages, but only the costs relating to the production and the striking of the set will qualify for Theatre Tax Relief. The costs that you have incurred in the development phase i.e., when you were considering whether you would go ahead with the production, and the running of the production itself, they will not qualify for the relief.
However, it’s only the direct costs relating to production and the striking of the set that will qualify for the relief. Examples of these would be, the making of the stage scenery and the actors’ time during rehearsals. Indirect costs, such as, marketing, finance, and legal costs do not qualify.
What types of productions qualify?
Qualifying productions are theatrical productions which can be a play, an opera, a musical or relevant dramatic piece where the actors, singers, dancers or other performers are playing roles.
At the beginning of the production phase, you must intend that all or a high proportion of the performances of the production will be live. A performance is ‘live’ if it is to an audience before whom the performers are actually present.
How do you make a claim for Theatre Tax Relief?
The claim forms part of your production company’s corporation tax return (CT600). Separate profit and loss accounts for each production must be prepared and included in the claim.
What are the rates that can be claimed?
For productions where the production phase started before 27 October 2021, relief will apply at rates of 20% for non-touring productions and at 25% for touring productions which is equivalent to 16p or 20p per £1 of qualifying expenditure respectively. The relief is capped at an equivalent of £500,000 of qualifying expenditure per exhibition. The relief is based on 80% of eligible expenditure, meaning the maximum cash repayment per exhibition will be £80,000 for non-touring productions and £100,000 for touring productions.
From 27 October 2021 to 31 March 2023 the rates have increased to 45% and 50% respectively. This is equivalent to 36p or 40p per £1 qualifying expenditure respectively. These rates apply to productions where the production phase started on or after 27 October 2021. The maximum cash repayment per exhibition will be £180,000 for non-touring productions and £200,000 for touring productions.
For the year to 31 March 2024 year the rates will be 30% for non-touring productions and 35% for touring productions which is equivalent to 24p or 28p per £1 qualifying expenditure. The maximum cash repayment per exhibition will be £120,000 for non-touring productions and £140,000 for touring productions.
How long do I have to submit a claim?
The TTR claim must be submitted within two years from the end of the accounting period. For example, a claim for the year ended 31 March 2022 must be submitted by 31 March 2024.
How can we help?
We have experience in successfully making Theatre Tax Relief claims on behalf of our clients resulting in significant amounts being generated. We can review your circumstances to provide an initial eligibility assessment. We can then handle all aspects of preparing the claim, submission to HMRC and dealing with all resulting communications.
For further information on our Theatre Tax Relief service, please contact us