Theatre Tax Relief (TTR) was introduced by the Finance Act 2014 to support the theatre sector and came into force on the 1st September 2014. It is available to companies, including charities, that produce theatrical productions.
The company receives an additional deduction based on the costs of creating each theatrical production. This either reduces the company’s liability to Corporation Tax, or, and this is particularly relevant for charities who are commonly exempt from Corporation Tax, where the additional deduction creates a loss, the loss can be surrendered for a payable tax credit.
The tax credit is paid at the rate of 25% for those productions that meet the definition of a touring production and 20% for those that don’t. Qualifying productions include a wide-range of theatrical productions from traditional West End productions through to amateur companies including youth theatre, opera to panto and from ballet to Theatre in Education companies and more.
If your organisation is a company, a charitable incorporated organisation (CIO or SCIO) or a community interest company (CIC), then it falls under the Corporation Tax regime and can apply for TTR – yes, even if it is a charity and doesn’t currently complete tax returns!
If your organisation is a trust or an unincorporated association, then you cannot claim TTR. That said, there may be good reasons why a change of structure may be beneficial, especially if you are keen to operate within a structure that limits personal liabilities.
TTR is a fantastic source of additional funding and it is worth checking whether your theatre company qualifies as the amounts claimed can be significant.
For more information contact Graham Suggett, Counterculture’s creative tax expert who can provide more details and advise you on all aspects of the above. Contact Graham at firstname.lastname@example.org.