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HMRC internal manual

Theatre Tax Relief

Taxation: separate theatrical trade: introduction

S1217I-S1217IF Part 15C Corporation Tax Act 2009 (CTA 2009)

Where a company is a Theatrical Production Company (TPC) (TTR10110) for the purposes of Part 15C CTA 2009, a qualifying theatrical production (TTR10100) is treated as a separate theatrical trade if Theatre Tax Relief (TTR) is claimed in respect of that production.

The profits and losses of the theatrical trade must be calculated separately from any other activities of the company (including any other theatrical production).  The Part 15C 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 production.

In producing their statutory accounts, TPCs 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 TTR therefore set out a consistent approach to calculating taxable profits of TPCs separate theatrical trades where TTR 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 theatrical trade can be used and this will vary depending on whether or not the production has been completed and the trade has ceased (TTR20110).

If no TTR claim is or has been made in respect of a production the rules for TTR do not apply.  The production is not treated as a separate theatrical trade and the special loss provisions do not apply.