What is Theatre Tax Relief & how do you apply?

A question we
often get asked is, what is theatre tax relief? Do I qualify? And what actually is the relief? In this short video we will
look at what the relief is, who qualifies, and how
to go about claiming it. Hi, I’m Hazel Pratt,
senior manager and head of tourism and
hospitality at Henderson Loggie. The theatre tax relief came in back on the first
of September 2014. And since then, we have
managed to make claims for a number of clients and
claim back over £600,000 in cash for our clients. This relief recognises the value that the theatres bring
to the cultural sector in the community
and around the UK. So who can make this claim? First of all, you have to
be a production company. And by definition that
means you’re within the charity corporation tax. So, if you’re an individual,
a trust, a partnership, or an unincorporated
association, you won’t be able to qualify. Sometimes charities
think that they would not be able
to claim the relief because they don’t
pay corporation tax. However, charities are within
the charity corporation tax. But most of their
income will be exempt. So if you are a SCIO or a charity that is
limited by guarantee, you will be able
to make a claim. So what costs can qualify? Let’s take a step
back first of all. There are various phases to
actually putting on a show. The first thing you
will be considering is, well, will we actually
go ahead with it? Once the decision’s been made, you then go into the production
stage, i.e. the rehearsals. Getting the actors together. The third phase,
that’s actually when the production is running. You’ve opened the doors. The public are in. The fourth phase is when
you’re de-installing. You’re striking the set. So we have four stages, but
only the costs relating to the production and the
striking of the set will actually qualify for
the theater tax relief. The costs that you’ve incurred
in the pre-production, i.e. when you were
thinking about whether you would go ahead
with the show, and the running of
the show itself, they will not
qualify for relief. So we’ve got our two phases. But it’s only the direct
costs that you’ve incurred during these that will
qualify for the relief. Examples of these would be
the making of the actual stage scenery and the actors’
times during rehearsal. What wouldn’t qualify are the
costs that you’ve incurred that are indirect costs. Such as marketing,
finance, and legal costs. So how do we bring
it all together? The claim itself forms part of
your corporation tax return. You need to prepare separate
profit and loss accounts for each of the shows. To make sure you
capture and gather all of the costs that qualify, it’s a good idea to get
your accountant involved at this stage. So that was a general overview of what the theatre
tax relief is. If you’ve got any
questions or comments, please feel free to put them
in the comments box below. Or, if you want to
contact me directly, please get in touch. Thanks for watching,
and we’ll see you again.

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