Research and analysis

Executive Summary: HMRC Cultural Tax Relief Evaluation

Published 21 May 2026

Executive summary

Introduction and methodology

HM Revenue and Customs (HMRC) commissioned Ipsos to evaluate the impact of the cultural tax reliefs: Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR), and Museums and Galleries Exhibition Tax Relief (MGETR). The reliefs allow qualifying organisations in the theatre, orchestras, and museums and galleries sectors to reduce the amount they pay in Corporation Tax, by increasing their amount of allowable expenditure, surrendering a loss in exchange for a payable tax credit, or both. The reliefs aim to support the creative industries, incentivise touring productions and exhibitions, and enhance the financial stability of cultural organisations.

This theory-based evaluation, underpinned by a Theory of Change, assessed the reliefs’ process and impact. The evaluation sought to understand:

• claimants’ experience of making claims for the reliefs

• how the reliefs are used

• the direct and indirect impacts of the reliefs

The evaluation involved a survey with relief claimants, conducted online and by telephone. 512 claimants of the reliefs since January 2022 took part in the survey, including 357 TTR claimants, 83 OTR claimants, and 72 MGETR claimants which represents around 25% of claimants during the period. A census approach was taken to the survey, with results weighted to the full population of claimants to ensure the final profile of survey respondents is representative. Qualitative interviews were conducted with 54 claimants, split across the three reliefs. Fieldwork was conducted between June and August 2025.

Claimants’ experience of making claims for the reliefs

Overall, the experience of making claims for the cultural tax reliefs was mixed. On balance, claimants found the process of claiming or preparing the information required by their financial advisor to make the claim easy. Just over half (52%) of TTR and OTR claimants said this, while this figure was 42% for MGETR. However, around a quarter of claimants for each of the reliefs found the process difficult (26% TTR, 24% OTR, 28% MGETR). Claimants were more likely to find the claims process easy if they made use of an external agent or industry group to support their claim. Most claimants used a financial agent, at least partially, to support their claim (91% of TTR claimants, 85% OTR and 83% MGETR).

The length of time needed to complete the claim or provide their external agent with the information required varied between claimants. For some it took 1 to 2 days (30% TTR, 32% OTR, 25% MGETR) while for others it took over 3 weeks (20% TTR, 6% OTR, 31% MGETR). The length of time was linked to the size of claim, with larger claims requiring longer to prepare.

Claimants suggested the application process could be improved through clearer guidelines and training resources on the application process, regular updates on claim status and a simplified online portal for submission with standardised templates to upload to accounting software.

How the reliefs are used

Across all relief types, high proportions of claimants said the productions and exhibitions covered by their most recent claim were unprofitable (57% TTR, 77% OTR, 65% MGETR). Profit was not the key goal for most organisations interviewed qualitatively. Instead, the primary aims of claimants were to cover overhead costs, support financial stability and increase accessibility of the cultural sector. In some cases, the reliefs were used to offset losses to allow tickets to be offered free or at the lowest possible price. Qualitatively, claimants explained the reliefs did not always affect current productions and exhibitions but did impact plans and ambitions for future work.

The reliefs were considered when deciding the quantity and quality of productions, concerts, and exhibitions. Some claimants also reported being able to take greater creative risks due to the reliefs. This was particularly true for OTR claimants with 77% saying they were able to take more creative risks, 69% for TTR, and 45% for MGETR. Creative risks included either more niche productions and exhibitions that were likely to attract lower audience numbers or more ambitious projects with higher costs. The reliefs commonly contributed to higher production and exhibition budgets, where 58% of TTR, 64% of OTR, and 48% of MGETR claimants reported a larger budget as a result of the relief.

Without the reliefs, organisations said they would be required to scale back performances or have shorter runs, reduce creative risk, and lower production quality such as by using less well-known performers.

Direct and indirect impact of the reliefs

Location

The cultural tax reliefs aim to encourage cultural productions and exhibitions within the UK. Additionally, the reliefs are intended to support touring productions and exhibitions to reach audiences across the country.

The evidence suggests that the reliefs influenced decisions to develop productions and exhibitions in the UK, particularly so for theatrical productions. 72% of TTR claimants reported the relief had at least some impact on their decision to make the production or exhibition in the UK. This was higher than OTR and MGETR where 54% and 57% of claimants said their decision to develop productions in the UK was influenced by the relief.

TTR also appeared to influence touring decisions. 81% of TTR claimants reported at least some influence on their decision to tour with 22% saying it was a deciding factor. However, 59% said that they would have probably or definitely taken the production on tour regardless of the higher rate, with only 6% saying that they would definitely not have toured without the higher rate of relief.

Audiences

The reliefs intend to increase cultural participation and widen access to productions and exhibitions. The evidence suggests that the reliefs do successfully contribute to the goal of attracting wider audiences. 67% of OTR claimants, and 62% of TTR claimants, said the relief allowed them to attract a wider audience to some extent, with the respective figure slightly lower for MGETR at 50%. Additional performances were also supported by the reliefs, with 51% of TTR claimants and 37% of OTR claimants reporting they were able to put on additional performances because of the relief.

Staffing, Talent and Skills

It is intended that the reliefs create or maintain jobs within the sector, and nurture creative talent.

The reliefs have helped increase the number of staff employed, with 39% of TTR claimants, 19% of OTR claimants and 28% of MGETR claimants stating they increased the number of staff they employ because of the relief. It is estimated that the number of jobs on productions or exhibitions supported by the reliefs since January 2022 equates to 276,000 for TTR, 66,000 for OTR and 22,000 for MGETR. 

The reliefs were described in the qualitative interviews as an important source of funding for staff salaries, which can fall between the gaps of other restricted funding streams. They allow organisations to retain the best talent through offering competitive wages and a creatively fulfilling place to work.

Financial Stability

By providing these reliefs, the aim is to contribute to the financial resilience of cultural organisations.

Qualitatively, many claimants described the reliefs as ‘crucial’ or ‘a lifeline’ for the creative sector. They spoke about the vital role reliefs play in bridging immediate cashflow issues, supporting operational core costs and protecting the erosion of long-term reserves. This was considered particularly important as other income sources such as Arts Council funding remain static while core costs rise.

However, some claimants indicated that the time lag between incurring production costs and receiving tax relief could often be 12 to 18 months, creating cash-flow instability. Several said they must build up reserves to bridge the gap. In some cases, delays forced short‑term borrowing.

The majority of claimants make income from ticket sales, donations and grants and venue commercial activities such as selling merchandise. Only a small minority of claimants agreed the reliefs made it harder to access other sources of funding (6% TTR, 7% OTR, 3% MGETR).

Deadweight Assessment

The reliefs are primarily intended to increase the number of productions and exhibitions to bolster cultural production and ensure accessibility to the arts.

‘Deadweight’ refers to productions and exhibitions that would have gone ahead unchanged without the relief. The deadweight since April 2022 was estimated to be approximately:

• 21% for TTR. This was extrapolated across the relief to equate to ~2,050 TTR productions.

• 14% for OTR. Extrapolated across the relief, this equates to approximately ~220 productions.

• 36% for MGETR. Extrapolated across the relief, this equates to approximately ~1,910 exhibitions.

The deadweight analysis is based on key indicators from the quantitative survey. Findings should be interpreted cautiously due to potential survey respondent biases. More detail on these considerations can be found in the full report.

Conclusions             

Overall, the evaluation found evidence to suggest the reliefs are meeting their intended aims to some extent. The reliefs appear to have encouraged the creation of productions and exhibitions, particularly so for TTR and OTR where the deadweight calculations were lower. There is evidence to suggest that the reliefs encourage productions and exhibitions to be made in the UK, though this is more so for TTR compared with OTR and MGETR. TTR has also been an important factor in the decision to tour, although the additional touring rate itself had limited influence. Claimants believe the reliefs have enabled them to reach wider audiences (particularly so for TTR and OTR).

Claimants described the reliefs as crucial for the financial stability of cultural organisations, as well as affording them opportunities to scale-up productions and exhibitions, be more creatively ambitious, enhance production quality, and broaden audience reach.

However, there is evidence of deadweight whereby productions and exhibitions would have gone ahead unchanged without the relief.