Live performances to paying audiences are the main focus of the tax relief, but live streaming and educational productions will also qualify.
Eva Rinaldi (CC BY-SA 2.0)
Details of how the Theatre Tax Relief (TTR) announced in the 2014 budget will be implemented have been published by HMRC. The Finance Act 2014 introduced new rules giving Theatrical Production Companies tax relief on their productions, currently at 25% for touring productions and 20% for all other qualifying productions. But only now have full details of the eligibility for that relief, and details of how taxable profits and losses from qualifying productions will be calculated, been spelled out.
At the core of TTR is the requirement for each production for which tax relief will be claimed to be treated as a separate enterprise, and there are clear definitions as to what is regarded as a theatrical production. Plays, operas and musicals intended for live performances are included, as are productions to be live streamed “provided the main object or one of the main objects of the company’s activities was to put on live performances in relation to the production.” Recorded performances will also qualify so long as the recording is not the main object of the production. Circus productions will qualify if they are scripted and dramatic, as opposed to being presented as “a display of athleticism, skill or strength.” A production will only qualify, however, if it is intended for live performances to paying members of the public, with the aim of making a profit. The only exception to this is work for educational purposes, so that a company whose charitable aim is educational can perform live to schools and still qualify for the relief.
HMRC has set up a Creative Industries Unit to deal with claims for TTR and the other creative industries tax reliefs, including film and video games.