What is Theatre Tax Relief and how do you apply?

What is Theatre Tax Relief?

The Theatre Tax Relief was introduced on 1st December 2014. Since then we have claimed back over £600,000 in cash for our clients.

Who can make a claim for Theatre Tax Relief?

Firstly, 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 SCIO or 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 show. The first phase is when you are considering whether or not you will go ahead with the show. Once the decision has been made to proceed, you then go into phase two, the production phase, i.e. the rehearsals, getting the actors together. The third phase is when the production is running and you have opened the doors to the public. The fourth phase is when you are de-installing, you’re striking the set.

There are four stages, but only the costs relating to the production and the striking of the set will actually qualify for the Theatre Tax Relief. The costs that you have incurred in pre-production, i.e. when you were thinking about whether you would go ahead with the show, and the running of the show 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 actor’s time during rehearsals. What would not qualify are the costs that you have incurred that are indirect costs, such as, marketing, finance, and legal costs.

How do you make a claim for Theatre Tax Relief?

The claim itself forms part of your corporation tax return. You are required to prepare separate profit and loss accounts for each show. To make sure that you capture and gather all the costs that qualify, it’s a good idea to get your accountant involved at this stage.

Any questions about Theatre Tax Relief?

If you have got any questions or comments, please contact info@hlca.co.uk.

The information in this video is of a general nature and seeks to highlight some of the issues which could be affecting you and/or your business, including changes to financial regulation and legislation. Viewers should not rely on this information without seeking professional advice on its application in their circumstances.