On the 6th Day of Christmas the Taxman gave to me… money for putting on a festive panto part-ee!
Christmas is the season for taking your children to a pantomime, for work’s Christmas outings to see a show, or a trip to the theatre with your significant other. It is often a real Christmas treat, but what do the theatre producers get? Well for the first time this year, they can get a Christmas treat too, in the form of a tax credit from HM Revenue & Customs.
This is a corporation tax relief, and even though many theatre production companies don’t pay corporation tax, they are generally within the charge to corporation tax and so qualify for the relief.
Who qualifies for Theatre Tax Relief?
It is the production company which qualifies for the tax relief. This is the company responsible producing and running the theatre production, not the theatre itself (though sometimes these can be the same company in the case of small local theatres putting on their own plays etc). The company must be actively engaged in decision making during the production, making an effective creative, technical and artistic contribution to the production, and it must be directly paying and negotiating contracts for goods and services related to the production.
A whole variety of types of production qualify, but it must be a live dramatic production, where the cast are mainly acting out roles (thus ruling out shows where the cast play themselves, such as is generally the case with stand up comedians). It can include plays, opera, musical, ballet or other dramatic performances. It must be for either paying guests or put on for educational purposes, and there’s a few other conditions, but most dramatic performances should be able to qualify for the relief.
What do the production company get?
The production company can generally get up to 20% of their qualifying costs on the production as either a deduction from their corporation tax bill if they are tax paying, or as a payable tax credit if they aren’t. For touring productions the relief is even more generous, as they can get up to a 25% tax credit.
This is a really generous new tax break, so if you think you might qualify, then get in touch today. Even if you don’t pay corporation tax or haven’t needed to submit a tax return for years, you may still be able to claim a tax credit. The sooner you start thinking about this the better, as you will need to start separately identifying income and expenditure for each qualifying production.
If theatre tax tax isn’t enough for you, the Chancellor announced in his Autumn statement earlier in the month that he is introducing an Orchestra tax relief from 2016. In the meantime however, enjoy the Christmas pantomime if you are going this Christmas, and just think that maybe this year HMRC aren’t quite the villain you always thought they were!
Come back tomorrow for another Christmas tax break.