TTR55110 - Calculation: surrenderable losses and Theatre Tax Credit – example - single-period production
The following example illustrates how a Theatrical Production Company (TPC) that sustains a surrenderable loss can surrender that loss in return for a Theatre Tax Credit (TTC) (TTR55100). In this case the production is completed within a single period.
Example
A TPC makes a qualifying production with total core expenditure of £1m, all of which is European expenditure. The production was commissioned by a producer who pays £900k for it. The production is presented at eight separate premises and meets the touring conditions.
| - | Amount |
|---|---|
| Income | £900k |
| Expenditure | (£1m) |
| Trading loss before Theatre Tax Relief (TTR) | (£100k) |
| Theatre Tax Relief - additional deduction | (£800k) |
| (80% x £1m total core expenditure) | - |
| Trading loss after TTR | (£900k) |
The surrenderable loss is the lesser of:
- the £900k trading loss after TTR, and
- the £800k additional deduction.
In this case the TPC can surrender up to £800k and chooses to surrender the full amount. A TPC is not obliged to surrender the entire loss, but it will most likely do so.
The amount of TTC due is therefore £200k (25% TTC rate for touring productions x £800k loss surrendered).
In this example the TTC is equal to 20% of the total core expenditure.