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HMRC internal manual

Theatre Tax Relief

Eligible expenditure: attributing costs across the phases of production

The rules for Theatre Tax Relief (TTR) describe the phases of production that are typical for a generic theatrical production.

Phases of production do not always take place in a strict sequential manner.  Some items of expenditure may be attributable in varying degrees to several phases.

For example:

  • the script will normally be written during development and is required throughout the phases of production. It may be reworked throughout the production, but it will be required from development through to production
  • a production designer might be engaged to assist with both developing and producing the production
  • an actor will typically be involved in rehearsals during the production phase as well as live performances during the running phase of the production.

It would be reasonable to consider that all these examples contribute to more than one phase of theatrical production.

It is important to first identify which phase or phases of production a given item of expenditure contributes to.  It is then necessary to determine how much of the expenditure is attributable to each phase identified.

This two-step process is important when determining what expenditure is attributable to development or ordinary running activities.  Expenditure on development and ordinary running activities is not core expenditure and so does not qualify for TTR.

It is therefore important to identify and quantify expenditure that contributes to developing and running the production.

The attribution of costs between the phases of production must be done on a just and reasonable basis.