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HMRC internal manual

Orchestra Tax Relief

Orchestra Tax Relief: taxation: profit/loss calculation: expenditure: nature

Part 15D Corporation Tax Act 2009 (CTA 2009)

Where profits or losses of the separate orchestral trade of an Orchestral Production Company (OPC) are within the rules in Part 15D CTA 2009, the expenditure to be brought into account in calculating the profit or loss will be all the expenditure on:

  • the activities involved in developing, producing, running and closing the concert or series,
  • and activities with a view to exploiting the concert or series.


Expenditure which would otherwise be treated as capital because it relates to the creation of the concert or series (rights in which would be reflected as an asset on the balance sheet) is treated as revenue expenditure.  This treatment extends only to costs that relate to the creation of an asset (the concert or series) – so it does not apply to expenditure on the acquisition of plant and machinery since that would be capital regardless of the creation of the concert. For example, the purchase of a new piano which will be used in multiple concerts over several years would be a capital expense.

The rules in Part 15D CTA 2009 determine how income and expenditure of a concert or series are brought into account as debits and credits in computing the profit of the separate orchestral trade. These rules take precedence over the intangibles regime for expenditure which is related to making the production (S808A Corporation Tax Act 2009).

Where income or expenditure is not related to making the concert or series and is subject to a specific tax regime (for example because it is proper to the loan relationships or intangibles regimes) the computational rules in those regimes will take priority, as they do for other trades.  Any trading debit or credit arising from those regimes will then be brought into account in addition to those for OTR.

The normal rules determining whether particular items are allowable for tax purposes in computing the profits of a trade (see BIM42051+ of the Business Income Manual) still apply.

For more information on the loan relationships legislation in particular, see CFM30000+ of the Corporate Finance Manual.

The requirement to treat capital expenditure as being on revenue account only applies where the expenditure is on creation of the orchestral concert or series and would otherwise be treated as expenditure on creation of an asset.

The revenue treatment of expenditure does not apply to the purchase of capital items, such as new musical instruments.  Expenditure on these items remains capital expenditure and capital allowances will be available where appropriate.

No double deductions

Expenditure is not deductible under Part 15DC CTA 2009 if it has been relieved under the reliefs available for Research and Development (R&D) expenditure (CIRD80000 of the Corporate Intangibles Research & Development Manual).  These reliefs are the SME scheme, large company scheme and the Research and Development Expenditure Credit scheme.