Chapter TTR10130
| Published date | 26 April 2016 |
| Record Number | TTR10130 |
| Court | HM Revenue & Customs |
| Issuer | HM Revenue & Customs |
Theatrical production expenditure is expenditure incurred by the company on:
- the activities involved in developing, producing, running and closing the production, or
- activities with a view to exploiting the production.
Theatre Tax Relief (TTR) is only available on core expenditure.
Core expenditure is expenditure on activities involved in:
- producing the production (including exceptional running costs), and
- closing the production.
Exceptional running costs, such as expenditure in connection with a substantial recasting or a substantial redesign of the set, may be treated as expenditure incurred on activities involved in producing the production if they are incurred on or after the date the production is first performed to the paying general public or provided for educational purposes.
Expenditure on activities involved in the development, ordinary running or exploitation of the production is not core expenditure and does not qualify for TTR. In addition, expenditure on any matters not directly involved in producing the production is not core expenditure and does not qualify for TTR.
The company may still be able to claim a deduction for this non-core expenditure under normal tax rules.
Phases of theatrical productionDevelopment
Development is the stage of creation of a production in which the project progresses from the initial concept to the point at which a decision can be taken as to whether or not it should proceed to production.
During development all the necessary elements are assembled to enable a producer to make a judgement on whether or not the production is a viable project.
Expenditure on development activities is not core expenditure and will not qualify for TTR if the production does not get ‘green lit’, that is if there is not a firm and definite commitment that the production will go ahead as evidenced, for instance, by ticket sales, hire of theatres, casting etc. The intention is to separate speculative expenditure on productions which never go ahead from purposive expenditure undertaken in the knowledge that a decision has been taken to proceed with the production.
However, if the production does get ‘green lit’, some expenditure on development may be reclassified as expenditure on producing the production if it directly relates to activities in the later production phase.
Production
The production phase begins once the project has...
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