Times have been particularly tough for the live music sector over the last 12 months, and particularly so for those organisations who already relied on a combination of public funding and ticket sales to keep them afloat, such as orchestras. With the live music sector hoping for a return to normal by the Autumn, orchestras will be looking for ways to save money, and fortunately there is already a government scheme that can help them to do so.
Orchestra Tax Relief is one of the Creative Industry tax reliefs – a group of 8 Corporation Tax reliefs that allow qualifying companies to increase their amount of allowable expenditure. This can reduce the amount of Corporation Tax the company needs to pay, or in the case of a loss, may allow them to convert some or all of this loss into a payable tax credit.
Orchestra Tax Relief
A company can claim Orchestra Tax Relief if it’s a qualifying orchestral production company putting on a qualifying orchestral concert.
A qualifying orchestral concert is one which:
- is performed by an orchestra, ensemble, group or band consisting wholly or mainly of instrumentalists who are the primary focus of the concert
- consists of a minimum of 12 instrumentalists
- all or the majority of the instruments are not electronically amplified
- is intended to be performed live for the paying public or for educational purposes
- at least 25% of core expenditure is on goods or services provided from within the European Economic Area (EEA)
In order to claim, your company mut be responsible for putting on the concert from start to finish, including employing or engaging the performers, and actively engaged in planning & decision making, including directly negotiating, contracting, and paying for rights, goods and services.
If you qualify, you can claim 80% of core expenditure, or the total amount of UK core expenditure, against your Corporation Tax, whichever is the lower amount. Core expenditure is expenditure on producing the production. It does not include expenditure on the actual performance. If you make a loss, some or all of this loss can be surrendered for a payable tax credit at a rate of 25%.
You can make your claim on your company tax return and may make, amend or withdraw a claim up to one year after the company’s filing date.
