Cultural Relief Rate Rises for Theatre, Orchestra, and Museums and Galleries Exhibition Tax reliefs
Published 27 October 2021
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Who is likely to be affected
Companies claiming tax relief for theatrical productions, orchestral concerts and museum and gallery exhibitions.
General description of the measure
The government intends to raise the rates of three corporation tax reliefs that are collectively referred to as the ‘cultural reliefs’: Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR), and Museums and Galleries Exhibition Tax Relief (MGETR).
This is intended as a temporary measure to have beneficial outcomes for the sector in the UK’s economic recovery from coronavirus (COVID-19). As such, the rate increase is intended to last for two years and five months beginning from 27 October 2021. The rates will taper down from 1 April 2023 before returning to current levels from 1 April 2024. Details of the rate rises (and the current rates of relief) are in the table below. The rises will apply where production activities commence on or after 27 October 2021.
Policy objective
The government intends to increase the rates of the cultural reliefs for the next two years in the following pattern, with rates for 2023 to 2024 returning to the current (2021 to 2022) levels:
| Rate % | Current Rates | From 27 October 2021 to 31 March 2023 | 2023 to 2024 | 2024 to 2025 (and onwards) |
|---|---|---|---|---|
| TTR: non-touring / touring | 20/25 | 45/50 | 30/35 | 20/25 |
| OTR | 25 | 50 | 35 | 25 |
| MGETR: non-touring / touring | 20/25 | 45/50 | 30/35 | 20/25 |
Background to the measure
The TTR was introduced by Finance Act 2014, with an effective date from 1 September 2014, OTR by Finance Act 2016, with an effective date from 1 April 2016, and MGETR by Finance Act (No. 2) 2017 with an effective date from 1 April 2017.
Detailed proposal
Operative date
The measure will have effect from 27 October 2021.
Current law
The current law is contained in Parts 15C, 15D and 15E of the Corporation Tax Act 2009.
Proposed revisions
Section 1217K of the Corporation Tax Act 2009 will be amended for TTR, section 1217RG of the Corporation Tax Act 2009 for OTR, and section 1218ZCH of the Corporation Tax Act 2009 for MGETR. These amendments will increase the rate of reliefs as set out in the above table.
Summary of impacts
Exchequer impact (£m)
| 2021 to 2022 | 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 |
|---|---|---|---|---|---|
| -5 | -40 | -115 | -70 | -15 | nil |
These figures are set out in Table 5.1 of Autumn Budget 2021 and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Autumn Budget 2021.
Economic impact
This measure is not expected to have any significant macroeconomic impacts. It will help to support the creative industries.
The terms used in this section are defined in line with the Office for Budget Responsibility’s indirect effects process. This will apply where, for example, a measure affects inflation or growth. You can request further details regarding this measure at the email address listed below.
Impact on individuals, households and families
There is no impact on individuals as this measure only affects businesses. This measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
It is not anticipated that there will be impacts on groups sharing protected characteristics.
The terms used in this section are defined in line with the Office for Budget Responsibility’s indirect effects process. This will apply where, for example, a measure affects inflation or growth. You can request further details regarding this measure at the email address listed below.
Impact on business including civil society organisations
This measure is expected to have a positive impact on approximately 1200 companies that claim these reliefs on an annual basis, by temporarily raising the rates of three corporation tax reliefs that are collectively referred to as the ‘cultural reliefs’: TTR, OTR, and MGETR.
This measure is expected to have a negligible impact on business costs. One-off costs will include familiarisation with the change and could include updating software or internal systems to reflect the new rate. There are not expected to be any continuing costs. Customer experience is expected to remain broadly the same as this measure does not alter how businesses interact with HMRC. The measure is not expected to impact civil society organisations.
This measure is expected overall to have no impact on businesses’ experience of dealing with HMRC as it is purely a rate change.
Operational impact (£m) (HMRC or other)
Any operational impact is expected to be negligible.
Other impacts
Other impacts have been considered and none has been identified.
Monitoring and evaluation
The measure will be kept under review through communication with affected taxpayer groups. HMRC will monitor this measure through the analysis of claims data and the publication of summary statistics.
An external review of the MGTR was launched in 2020 and is due for publication in 2022.
Further advice
If you have any questions about this change, please contact Kerry Pope on Telephone: 03000 585740 or email: kerry.pope@hmrc.gov.uk, or Stephanie Martinez on Telephone: 03000 519492 or email: stephanie.martinez@hmrc.gov.uk.