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HMRC internal manual

Orchestra Tax Relief

Orchestra Tax Relief: not-for-profit organisations: direct tax

Qualifying orchestras or other musical groups in the not-for-profit sector are constituted as companies and are subject to corporation tax.  However, charities are exempt from corporation tax on a number of sources of income and gains including charitable trading profits, rental income, capital gains and interest, provided the income and/or gains are applied to charitable purposes only.

HMRC guidance about charities can be found at Charities (GOV.UK).


Where a not-for-profit organisation is a qualifying Orchestra Production Company (OPC) and has a qualifying concert or series of concerts the organisation can access Orchestra Tax Relief (OTR) on the same basis as any other OPC.  The calculation of the Orchestra Tax Credit is the same whether the OPC is a qualifying not-for-profit organisation or a commercial company within the charge to corporation tax.

This means that an OPC is entitled to claim OTR on its enhanceable expenditure provided:

  • the concert or series is a qualifying concert or series is not an excluded concert
  • not less than 25% of the core expenditure on the production is EEA expenditure


Single not-for-profit organisation as Orchestra Production Company

The not-for-profit organisation must qualify as an OPC.

Each qualifying concert or series must be treated as a separate orchestral trade for tax purposes

A charity should take professional advice on whether acting as an OPC in any way impacts on its charitable status.

It is beyond the scope of this guidance manual to comment on charitable status.

Orchestra Production Company that is a wholly owned trading subsidiary of a not-for-profit organisation

A not-for-profit organisation, such as a charity, may have or may set up a wholly owned trading subsidiary, which could become the OPC.

This model of using a special purpose vehicle is commonly used in the other creative industries tax reliefs.

The wholly owned trading subsidiary will be within the charge to corporation tax and must be a qualifying OPC.

It will not be sufficient for a not-for-profit organisation to carry on the functions of an OPC (directly negotiating contracts, etc) and merely to use the subsidiary to claim the tax relief.  The trading subsidiary in those circumstances will not be a qualifying OPC.

This is not to say, however, that a trading subsidiary which meets the OPC description cannot subcontract production activities back to a not-for-profit organisation.

A charity should ensure that using this model will not impact on its charitable status and consider the potential VAT implications (see OTR70030).

A charity should take professional advice on the tax and any other implications of setting up a separate trading subsidiary.


It is not HMRC’s responsibility to provide advice on tax planning.