What is it?
Originally introduced in 2014, this is a tax relief to support and encourage the creation of theatrical productions. The relief allows qualifying organisations to claim an additional deduction which reduces the Corporation Tax they pay or can result in a cash repayment from HMRC.
With many theatre production organisations having to restrict activities because of COVID-19, Theatre Tax Relief (TTR) can be an effective way to gain access to cash or reduce Corporation Tax burdens. If you’ve never explored the potential before, now is the time to discuss your potential for a claim, and even if you have already submitted a claim this year, there still may be additional options to consider. There’s no risk attached to exploring a TTR claim and if you don’t achieve a successful cash refund or a Corporation Tax reduction, it doesn’t cost you a penny.
Who can claim?
All of the following constitutions fall under the Company Tax regime and, even if they do not currently file Corporation Tax Returns, they can claim TTR if they produce qualifying theatrical productions:
- A company limited by shares
- A company limited by guarantee
- Charitable Incorporated Organisation (CIO)
- Scottish Charitable Incorporated Organisation (SCIO)
- Community Interest Company (CIC)
An organisation can claim tax relief if it meets all three of the following conditions:
- It is the “production company in relation to a theatrical production”;
- At the beginning of the production phase the company intends that all or a high proportion of the live performances that it proposes to run will be to paying members of the general public; and
- At least 25% of the core expenditure on the production incurred by the company is on goods or services provided from within the European Economic Area.
What costs can be included in a claim?
For the purposes of the relief, productions are divided into four phases.
- Development – Developing the concept
- Production – Preparing set, cast, props, costumes etc
- Running – Live performances
- Closing – Clearing away sets, props etc
Only costs incurred in the production and closing phases can be claimed for under the relief. This can include the cost of building sets, developing the script, developing the stage directions and the wages of the cast and crew during the rehearsals. Costs incurred during the development of the concept and running the production are not claimable.
How can we help?
Our specialist Creative Industry Tax Relief team are well versed in helping theatre production companies claim the tax relief.
So much so, we are proud to have a 100% success rate in claims being approved by HMRC. As a result of our work in this sector, we are able to present the necessary information to HMRC in a format that ensures the claim is processed quickly and efficiently.
We can assist in every aspect of the claim, from identifying qualifying productions, compiling the qualifying costs, calculating the relief and submitting the claim to HMRC.
Find out how much you could claim...
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