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HMRC internal manual

Theatre Tax Relief

HM Revenue & Customs
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Calculation: introduction

Theatre Tax Relief (TTR) is only available to Theatrical Production Companies (TPCs) that make qualifying productions.

Qualifying productions

A company meeting the definition of a TPC (TTR10110) is entitled to claim TTR on EEA core expenditure (TTR50010) on a production provided:

  • the production is intended to be performed live before paying members of the general public, or provided for educational purposes (TTR40020)
  • the production is a theatrical production that is not an excluded production (reference), and
  • not less than 25% of the total core expenditure is EEA expenditure (TTR40040).

Benefits of TTR: additional deduction and theatre tax credit

A TPC entitled to TTR can claim an additional deduction in computing its taxable profits relating to a separate theatrical trade.  See TTR55020 and TTR55030 for details of how the amount of the additional deduction is calculated.

The additional deduction can:

  • reduce the taxable profits of the separate theatrical trade (so that the company pays less tax), or
  • create or increase a tax loss, which the company can surrender in return for a payable Theatre Tax Credit (TTC) (TTR55100).

TTR only available to companies

TTR is not available to individuals, either alone or within partnerships, or to investors, financial institutions and those whose involvement in theatrical production is confined to providing or arranging finance.

The purpose of targeting the relief exclusively at TPCs is to ensure that Government support is delivered directly to theatrical production and is not used as a means of avoiding tax.  It also ensures that such support is delivered to production activity in its entirety rather than to separate theatrical production activities.

Core expenditure before 1 September 2014

TTR was introduced from 1 September 2014.  Strictly, only expenditure incurred after this date is eligible for an additional deduction.

However, as a concession for the transitional period, HMRC will allow expenditure incurred before the commencement date to be included in the calculation of the additional deduction if the goods or services for which that expenditure was incurred were not used or provided before 1 September 2014. For instance, expenditure incurred in August 20104 towards the construction of a set that was not used until December 2014 would be deemed to be eligible expenditure for TTR purposes. If you have queries relating to this, please refer, in the first instance to the Creative Industry Unit in Manchester.