beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Orchestra Tax Relief

Orchestra Tax Relief: calculation: surrenderable losses and Orchestra tax credit: example

The following example illustrates how an Orchestral Production Company (OPC) that sustains a surrenderable loss can surrender that loss in return for an Orchestra Tax Credit (OTC). 


An OPC undertakes a qualifying series with total core expenditure of £1m, all of which is EEA expenditure.  The production was commissioned by a producer who pays £900k for it. 

Income £900k
Expenditure (£1m)
Trading loss before Orchestra Tax Relief (OTR) (£100k)
Orchestra Tax Relief - additional deduction (£800k)
(80% x £1m total core expenditure)  
Trading loss after OTR (£900k)

The surrenderable loss is the lesser of:

  • the £900k trading loss after OTR, and
  • the £800k additional deduction.

In this case the OPC can surrender up to £800k and chooses to surrender the full amount.  An OPC is not obliged to surrender the entire loss, but it will most likely do so.

The amount of OTC due is therefore £200k (25% x £800k loss surrendered).

In this example the OTC is equal to 20% of the total core expenditure.