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HMRC internal manual

Orchestra Tax Relief

Orchestra Tax Relief: qualifying concerts: live performance to paying members of the general public or provided for educational purposes

S1217RA Corporation Tax Act 2009

An orchestral concert can only be a qualifying concert for Orchestra Tax Relief (OTR) purposes if, at the beginning of its production phase, the Orchestral Production Company (OPC) intends that all, or a high proportion of, the live concerts that it proposes to give will be:

  • to paying members of the general public, or
  • provided for educational purposes.

 

Intention

The legislation does not specify whose ‘intention’ this should be.  But at any time there will normally be someone entitled to determine how the concert or series is to be exploited.  This would generally be the person who commissioned it.  For example, the trustees of the commissioning charity or directors of the commissioning company.

If there is any doubt about the intention, the following factors would count in favour of the production being intended for live performance to paying members of the general public or for educational purposes:

  • a finance plan written on the basis that the concert or series will be performed to paying members of the general public or provided for educational purposes and
  • payment to musicians and other participants on terms in line with those prevailing for similar concerts.

 

Paying members of the general public

This means that there must be an intention to run perform live before a paying audience, consisting of the general public. There will be a paying audience if the vast majority of the tickets for each of the live performances are reasonably made available for purchase by the general public.  Events held in private or restricted to membership of an organisation will not be eligible for the relief. An event which is open to the public but which has no ticket price but requests donations for attendance will also not be eligible.

 

Provided for educational purposes

Where a concert or series is given solely for educational purposes it does not have to be performed live before the paying general public.  This allows, for example, a charitable OPC whose main charitable aim is educational, to perform live to, say, schools to qualify for the relief.

‘Educational purposes’ is not specifically defined in the legislation.  However, the company must be able to demonstrate that its activities are wholly or mainly for educational purposes.  For example, it is not sufficient for a company to claim a performance is for educational purposes merely because it has the term ‘education’ in its articles.

A performance is not regarded as provided for educational purposes if the company is, or is associated with, a person who has responsibility for the audience or is otherwise connected with the audience (for example by being their employer).

A production company is associated with a person (P), if:

  • P controls the production company, or
  • P is a company which is controlled by the production company or by a person who also controls the production company.

‘Control’ has the same meaning as in Part 10 of Corporation Tax Act 2010.