Orchestra Tax Relief
Orchestra Tax Relief (OTR) was introduced in April 2016 to promote orchestral concerts in the UK. The scheme allows orchestral productions to either decrease their taxable profits or receive cash payments from the government.
To qualify, productions must include at least 12 instrumentalists. The majority of instruments must not be electronically or directly amplified. The production’s primary purpose must be a performance to the paying public, or for education. Concerts intended for promotional purposes, competitions or contests, or making a recording are excluded. A minimum 25% of Core Expenditure must be spent within the European Economic Area (EEA).
Production companies can receive 100% enhanced relief on as much as 80% of their Core Expenditure – broadly, anything related to making the production, as opposed to promoting. If you spend £100, HMRC will treat it as £180 expenditure.
Profitable productions can use this relief to reduce the amount they pay in tax. Unprofitable productions can cushion a loss by receiving a cash payment equivalent to 25% of the enhancement -one quarter of £80, in this example.
We have an extensive track record as accountants for the creative industry and have been using our expertise to guide productions in making the best use of Creative Industry Tax Reliefs (CITRs) ever since they were first introduced in 2007. If you would like advice on how best to take advantage of the Orchestra Tax Relief, please don’t hesitate to contact us.