Busting the myths around theatre tax relief

Graham Suggett is a former Lead Tax Specialist with HMRC’S Creative Taxes Team. Having been a Tax Inspector for 16 years, including four with the Creative Taxes Team, he recognised that too few theatre production companies were claiming Theatre Tax Relief. He set up a consultancy, Creative Tax Reliefs Limited to address this. 

‘I decided to leave HMRC and work directly with creative companies helping them claim the creative tax credits.  Thankfully, I’d seen the opportunity to work for myself before I became the dusty, old, grumpy Tax Inspector that I inevitably would have become. Admittedly I seem to have stepped away from the Monday to Friday 9-5, into the Monday to Sunday 8-8, but when you enjoy what you do, and you are your own boss, it doesn’t often seem like work.

Since 01 April 2017, the company has claimed over £850,000 in tax credits in respect of over 375 theatrical productions with two thirds being due to charities. We have submitted claims on qualifying productions including traditional ballet, contemporary dance, youth theatre, theatre in education, pantomimes, opera, musical theatre, and productions within festivals as well as traditional theatre, touring and non-touring.

Generally speaking, I’ve found that there are a couple of common misconceptions around whether or not charitable companies can claim TTR.

The first being: “We are a charity and don’t pay tax, therefore TTR doesn’t apply to us”.

This is not the case. The fact that an incorporated charity is commonly exempt from paying Corporation Tax doesn’t prevent it from claiming the tax credit. The credit is not a repayment of tax paid.

The second being: “We don’t file tax returns so can’t claim TTR”.

This is both right and wrong.  The claim for TTR can only be made in a tax return.  However, the critical question is, why does the charity not file a return?  The fact that HMRC has never asked it to, doesn’t mean that it can’t.  The question is rather whether the charity falls within the Corporation Tax regime?  If it does, it is entitled to file a tax return if it wishes to.

Theatre Tax Relief is as close to free money as theatre companies are going to get and it gives me great satisfaction to make companies aware of the relief and then help them claim the maximum allowed under the legislation.  The amounts can be significant and make a substantial difference to the companies claiming.  Yes, there are hoops to jump through and yes, it does involve interaction with HMRC. However, in my experience, the reward is worth the effort.

If you think you meet the criteria, do explore the possibility further. I’m always available for a chat.’

Graham Suggett, July 2018

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The Creative Taxes Team were recognised in the HMRC People Awards 2016 for ‘Building HMRC’s Reputation’.

Find Graham’s brief guide to claiming Theatre Tax Relief in the house resources hub

Image by QuinceMedia on Pixabay (Pixabay) [CC0], via Wikimedia Commons