Theatre Tax Relief (TTR) is a government incentive aimed at supporting Theatrical Production Companies. It can financially asist companies that actually produce dramatic productions or ballets for live performance.
By claiming it a production company can reduce its pre-performance costs by 20-25%. In order to qualify, the company must subject to UK corporation tax.
Theatre tax relief (also known as Theatre Tax Credit) works by allowing theatre producers to claim additional deductions in the company’s tax return reated to the production costs.
Theatre tax credit is offered as a benefit to both profitable and loss-making theatrical companies. One unique aspect is that some businesses that claim corporation tax exemptions can also apply.
2. the theatrical production meets certain criteria
3. primary focus is to play to a live (paying) audience
4. it has a minimum 25% EEA expenditure
Frequent Questions
Which companies can claim?
The company must subject to UK corporation tax. This is usually a limited company, a charitable incorporated organisation or a community interest company.
Unfortunately, if your organisation is a trust taxed under the Income Tax regime or an unincorporated association, it cannot claim TTR. Nonetheless, a trust or an unincorporated association can set up a production company in order to claim theatre tax credit.
How much can I claim?
The amount of theatre tax credit is proportional to the amount you spend on a production. The more the costs or the higher the number of theatre productions, the higher the reward.
On average by claiming TTR a production company can reduce its ‘core expenditure’ costs by 20-25%. There are some restrictions on costs borne outside the European Economic Area (EEA).
Is BFI cultural test required?
The short answer is ‘No!’. While films, television programmes, animations and video games must pass a BFI cultural test in order to qualify for the creatives tax reliefs, the cultural test is not a requirement for theatrical production companies.
What productions qualify?
To qualify for theatre tax relief, a production must meet all of these conditions:
it is a theatrical production
intended to be performed live to paying audience or provided for educational purposes
at least 25% of the core production expenditure must be from within the European Economic Area (EEA)
What expenditure qualifies?
Theatre tax relief is only available on ‘core expenditure’, which is defined as expenditure on activities related to creating the production (including exceptional running costs) and closing the production.
To help identify eligible costs, theatrical productions are divided into the four phases shown here.
Expenditure on concept development activities only qualifies for TTR if the production gets the ‘green light’ to proceed to the next stages.
While running and live performance costs are not allowed for TTR, ‘exceptional expenditure’ related to substantial recasting or set redesigns is often allowed.
How to calculate theatre tax relief?
To help you with preparing your claim, we have provided an online TTR calculator and a TTR calculation example.
While you can take on the responsibility and apply for TTR yourself, there are many advantages of engaging a specialist. From saving hours of writing lengthy application-reports with tax calcualtions to not having to speak to the HMRC tax inspectors.
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