Theatre Tax Relief- Autumn Update

Theatre Tax Relief (TTR) has been in play now for just over a year, so how is it shaping up in practice?

Is the system working?
To date we have submitted several claims totalling nearly £800,000, of which over £450,000 have been paid out, with many more in the pipeline. In the vast majority of cases the amounts paid out have been for the full value claimed, with no adjustment.  Payout times vary, depending on how busy the Manchester office is, but 6-8 weeks is becoming the norm.

Were the HMRC guidance notes worth waiting for?
The long-awaited detailed guidance notes from HMRC finally appeared earlier this month, only a year later than anticipated.  Better late than never?  Whilst the notes (all 81 pages of them)  do fill in some of the gaps between the lines of the legislation, there remain certain grey areas which ultimately will only be resolved through application in practice by the Manchester Creative Industries tax unit.  We have already successfully fought some minor “battles” on behalf of clients! The full guidance notes can be found here.

What’s changed?
As we anticipated when TTR was first introduced, it has initiated a re-think of the structures commonly used to finance theatrical productions, and the wheel is still in the process of being refined, if not quite re-invented.   In particular co-productions, and especially those involving a not-for-profit partner, have been exercising our minds.  Profits attributable to non UK-corporate angels are now subject to corporation tax prior to distribution, and productions with significant overseas investment need careful consideration.  It is imperative that this is addressed at the earliest possible stage.

Can we help you?
Our very experienced theatre team, led by Paul Taiano (Paul.taiano@nlpca.co.uk) and Anthony Pins (Anthony.pins@nlpca.co.uk), are here to help, so please do not hesitate to contact them if you require assistance.