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TTR10010 | Overview and general definitions: introduction

From HM Revenue & Customs · Theatre Tax Relief

Finance Act 2014 introduced a new regime for the taxation of Theatrical Production Companies (TPCs) that claim a new relief for the theatre industry: Theatre Tax Relief (TTR).

The legislation provides specific rules for relief on theatrical productions, including touring productions, in addition to setting out how the taxable profits and losses of those productions shall be calculated.

The legislation only applies where a claim to TTR is made by a TPC (TPC10110) in respect of its qualifying theatrical production (TTR40030).

Tax treatment

For tax purposes only, the legislation:

  • deems that each production is a separate theatrical trade with a start and end date separate to that of the company's other trades

  • describes what expenditure is eligible for additional tax relief, and circumstances where there are exceptions to the normal rules for income and expenditure, and

  • restricts the use of losses associated with that separate theatrical trade in certain circumstances.

Theatre Tax Relief (TTR)

TTR is available to TPCs engaged in the making of:

  • theatrical production (TTR40020)

  • that are intended for live performance to paying members of the general public, or provided for educational purposes (TTR40030), and

  • where at least 10% of the core expenditure (TTR50010) is incurred on goods or services that are used or consumed in the United Kingdom (TTR40040).

Those TPCs that are entitled to TTR can claim:

  • an additional deduction in computing their taxable profits (TTR55010), and

  • where that additional deduction results in a loss, a Theatre Tax Credit (TTC) (TTR55100). This is a payable tax credit due to the TPC when it surrenders the loss.

Unlike the tax reliefs for Film, Television and Video Games, there is no need for a cultural test.

Theatre Tax Credit rates

The normal TTC rates are:

  • 45% for touring productions, and

  • 40% for all other qualifying productions.

The rates used to be 25% and 20%. Finance Act 2022 introduced temporary higher rates for productions that commence the production phase on or after 27 October 2021. The temporary higher rates were extended by Finance (No. 2) Act 2023 and lasted until 31 March 2025. See TTR10800 for more information.

Both the additional deduction and the TTC are calculated on the basis of core expenditure, up to a maximum of 80% of the total core expenditure by the TPC. Core expenditure is that expenditure directly incurred in producing and closing the production.

Commencement: TTR

TTR commenced on 1 September 2014.

Webinar

A recorded webinar covering the basics of Theatre Tax Relief is available here.