Orchestra Tax relief: taxation: separate orchestral trade: introduction
S1217Q-S1217IG Part 15D Corporation Tax Act 2009 (CTA 2009)
Where a company is an Orchestral Production Company (OPC) for the purposes of Part 15D CTA 2009, a qualifying orchestral concert is treated as a separate orchestral trade if Orchestra Tax Relief (OTR) is claimed in respect of that concert.
The profits and losses of the orchestral trade must be calculated separately from any other activities of the company (including any other orchestral concert).
An OPC may elect to have a series of concerts treated as a single trade for the purposes of the relief—see OTR30020
The Part 15D CTA 2009 basis applies a revenue treatment to income and to certain types of expenditure that would otherwise be treated as capital expenditure. Also, the rules applying to a trade should be applied to each concert or series of concerts.
In producing their statutory accounts, OPCs can account for their costs and income in a number of ways. This will vary according to their operating model and what they think best represents a true and fair view of the business.
The rules for OTR therefore set out a consistent approach to calculating taxable profits of OPCs separate orchestral trades where OTR is claimed. This approach is important when considering relief for losses.
There are special provisions which restrict the ways in which losses arising from a separate orchestral trade can be used and this will vary depending on whether or not the concert or series of concerts has been completed and the trade has ceased
If no OTR claim is or has been made in respect of a concert or series of concerts the rules for OTR do not apply. The production is not treated as a separate orchestral trade and the special loss provisions do not apply.