Theatre Tax Relief

How much can you claim?

Qualifying companies can claim an additional deduction on their Corporation Tax Return which will reduce their profits or increase any loss thereby reducing their Corporation Tax liability. As an alternative they can surrender a loss in return for a repayable tax credit.

The additional deduction will be the lower of:

• 80% of the total core expenditure
• the amount of core expenditure in the United Kingdom or European Economic Area

Essentially, core expenditure is expenditure incurred on pre-production, principal photography and post-production. It excludes expenditure on development, distribution or other nonproduction activities.

If the company is shown to make a loss after applying the additional deduction on it’s Corporation Tax Return, all or part of the loss can be surrendered in return for a repayable tax credit at a rate of 45%.

There is also a higher repayable tax credit rate of 50% if your production is touring. Your production will be classed as touring if:

• There is a minimum of 14 performances in at least 2 separate venues
• There is a minimum of 6 performances in 6 separate venues

The claim should be made within one year of the company’s filing date and can be amended or withdrawn within that period. 

In March 2023, it was announced in the Spring Budget that the higher rates of 45%/50% reliefs will be extended till April 2025 and then tapered down to 20%/25% from April 2026 onwards.