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Finance Act 2014

Background Note

52.The new tax relief for theatrical productions will allow qualifying companies engaged in the production of theatre to claim an additional deduction in computing their taxable profits and where that additional deduction results in a loss, to surrender those losses for a payable tax credit.

53.Both the additional deduction and the payable credit are calculated on the basis of UK core expenditure up to a maximum of 80% of the total core expenditure by the qualifying company. The additional deduction is 100% of qualifying core expenditure and the payable tax credit is 25% of losses surrendered for touring productions and 20% for all other theatrical productions.

54.The credit is based on the company’s qualifying expenditure on the production of a qualifying theatrical production of which at least 25% of the qualifying expenditure must be on goods or services that are provided for from within the European Economic Area.

55.The aim of this new relief is to encourage and support UK theatre producers to continue to develop, and to incentivise touring productions.

56.In March 2014 a Stage 2 consultation document: ‘Theatre tax relief’ was published giving more detail on the design proposals.

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