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HMRC internal manual

Theatre Tax Relief

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.


A TPC makes a qualifying production with total core expenditure of £1m, all of which is EEA 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.

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.