Did production work for your Christmas orchestral concert or theatrical production start post October 2021? If it did, your production company will be entitled to higher tax repayment rates for your creative industry tax claim this year – an extra special gift from HMRC, which could well be much appreciated as we seem to move toward another tough time for the industry.
The UK Government operates a number of schemes intended to recognise, encourage and help the UK’s creative industries. These tax reliefs are part of Corporation Tax legislation, which means that an organisation needs to be within the scope of Corporation Tax to be eligible – this could be a trading subsidiary of an arts charity, or a subsidiary of a local authority, or a private company (among others).
Current creative industry tax reliefs include:
- Orchestra Tax Relief
- Film Tax Relief
- Theatre Tax Relief
- Animation Tax Relief
- High-end Television Tax Relief
- Video Games Tax Relief
- Children’s Television Tax Relief
- Museums and galleries Tax Relief
If you have a production this winter…
Theatre tax relief
The relief is available against Corporation Tax for companies involved in theatrical productions and applies to expenditure incurred on or after 1 September 2014. This relief supports the production of plays, musicals, opera, ballet and dance. It’s given by way of a super additional deduction (up to 100% of qualifying core expenditure) and a payable tax credit (worth up to 25% of losses surrendered).
Orchestra tax relief
The relief is available against Corporation Tax for qualifying orchestra production companies putting on a qualifying orchestral concert. Relief is available for qualifying expenditure. Relief is given by way of a super additional deduction (up to 100% of qualifying expenditure) and a payable tax credit (worth up to 25% of losses surrendered).
Details on the qualifying criteria
If your production company is producing and running a theatre or orchestral production, it is this that qualifies for the tax relief – not the theatre itself (though sometimes these can be the same company in the case of small local theatres putting on their own productions). The production company must be actively engaged in decision making during the production, making effective creative, technical and artistic contributions, and it must be directly paying and negotiating contracts for goods and services related to the production.
We advise arts organisations to see if they are eligible for tax reliefs, and complete application forms and liaise with HMRC to apply for the relief. If your production company may quality, get in touch today to see how we can help you get your claim in to HMRC early and reap the festive tax rewards.
Author: Conall Boyle, CT: Corporate Tax
