Theatre Tax Relief

Since it was first introduced in September 2014, Theatre Tax Relief (TTR) has been pivotal in supporting theatrical productions across the UK. TTR is a relief against corporation tax that can be claimed against qualifying costs when developing and creating new shows. You can find out more about TTR, and how it works, at GOV.UK.

Theatre Tax Relief supports the development of new and innovative productions, providing audiences with the world-leading creativity the UK theatre sector is renowned for. Its benefits are also economic: the relief incentivises private investment and increases the UK’s global attractiveness for Foreign Direct Investment. This, in turn, creates new, highly-skilled jobs and generates wider economic returns from tourism and hospitality spending. It also provides additional support for not-for-profit theatres who are better able to amplify the value of public funding.

We estimate that at least £163 million was invested into theatrical productions in 2021-22 as a result of £38 million of Theatre Tax Relief. This is a return of over 4 to 1 for the public purse.

The Society of London Theatre (SOLT) and UK Theatre, and our members, recognise the vital importance of Theatre Tax Relief to the sector – this is why we are campaigning to protect TTR on two fronts:

  • Maintain the Theatre Tax Relief at the higher rate of 50/45% in perpetuity or at least until April 2027.
  • Working with HMRC to improve guidance and ensure the effective rollout of recent changes to TTR legislation
Maintain the Theatre Tax Relief at the higher rate of 50/45% in perpetuity or at least until April 2027

Rates of Theatre Tax Relief were raised during the COVID-19 pandemic to support theatres, many of whom were forced to close productions or change their business models overnight. The higher rates of relief meant that, as soon as companies were able to restart, they could access additional financial support from the UK Government. While lockdowns are a thing of the past, economic uncertainty is not. And while we were delighted that the UK Government decided to extend the Theatre Tax Relief rates – currently 45% and 50% for touring productions – for a further two years (to April 2025), we are calling for these rates to be retained in perpetuity.

Reducing the rate would diminish the number (and scale) of homegrown productions, reduce inward investment and risk stunting the theatre sector’s growth – at a time when the UK Government is seeking to grow the UK’s Creative Industries by £50bn and one million jobs by 2030.

Audience behaviours and spending-power have also radically changed following the pandemic. Ongoing cost-of-living pressures affect the disposable income available for theatre trips. The UK theatre sector needs certainty and financial commitment from the UK Government to ensure not only survival, but financial stability and growth in the years to come.

Maintaining the higher rate of Theatre Tax Relief in perpetuity is a key pillar of our priorities for an incoming government, ahead of the next General Election.

Working with HMRC to improve guidance and ensure the effective rollout of recent changes to TTR legislation

The UK Government has been reviewing Creative Industries tax reliefs and consulting on proposed changes to the law.

Earlier in the year, SOLT and UK Theatre were concerned that proposed changes in the draft Finance Bill could have a detrimental effect on the value of a Theatre Tax Relief claim and make the claims process increasingly burdensome.

However, as part of the autumn statement (November 2023), the UK Government made important and welcome changes, based on feedback from us and our members.

  • Previously, we were concerned with plans to only allow companies operating as a ‘going concern’ to claim TTR. However, following our advocacy efforts, the Bill now only limits claims from companies that are in liquidation or administration. 
  • Those looking to claim TTR will need to disclose connected party transactions and charge for those at an Arm’s Length Price, marking a significant improvement on initial proposals that would have hindered the use of Special Purpose Vehicles. 
  • And while plans to refine the definition of a theatrical production remain, we are assured by HMT and HMRC officials that this adjustment will preserving the emphasis on live performances.

We recognise that these changes will take some time to ‘bed in’, so SOLT and UK Theatre will work constructively with Government officials to seek clarity and share it with members.

In the meantime, members are advised to contact HMRC with any questions regarding TTR.

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