A new relief for theatre production companies was introduced with effect from 1st September 2014. Where the accounting period straddles this date, the results can be treated as two separate accounting periods.

A company which qualifies for the relief is entitled to make an additional deduction for tax purposes of between 80% – 100% of the qualifying expenditure. Qualifying expenditure is the core expenditure of a theatrical production excluding any expenditure for which a claim may already have been made under a similar relief.

A qualifying company must have a commercial purpose and there are a few other limitations concerning performance content. Core expenditure means expenditure on activities involved in producing and closing the production such as the cost of costumes but not marketing, legal, financial costs.

Where a company has a surrenderable loss, it may claim a theatre tax credit of either 25% for a touring production or 20% for a non-touring production. A touring production is one to be presented in not fewer than six separate premises.

A company qualifies for theatrical production relief if it:

(a)     Is the production company;

(b)     meets the condition in respect of EEA expenditure; and

(c)     satisfies the commercial purpose condition.

At least 25 per cent of the core expenditure must be on goods or services that are provided from within the EEA. EEA expenditure is defined as expenditure on goods or services that are provided from within the European Economic Area.

 Please get in touch if you would like us to advise you on making a claim.