Updated July 2025

Theatre production companies face an increasingly challenging financial landscape. Rising production costs, unpredictable audience numbers, and the lingering effects of recent industry disruptions have created a perfect storm of financial pressures. However, there's a valuable government initiative to support you in: Theatre Tax Relief (TTR).

Since its introduction in 2014, TTR has provided over £645 million in support to production companies across more than 24,700 productions. With enhanced rates recently announced by the government and the arts scene continuing its recovery, now is the perfect time to understand how your theatre company can benefit from this scheme.

What is Theatre Tax Relief (TTR)?

Theatre Tax Relief is a government tax incentive designed to support and encourage theatrical productions across the UK. The scheme recognises the vital role that live theatre plays in British culture and the economy, providing financial relief to production companies that bring stories to life on stage.

TTR works by allowing qualifying production companies to claim back a portion of their production costs, either as a reduction in their Corporation Tax bill or by surrendering their losses for a direct cash payment. This isn't just a small saving – companies can claim up to 80% of their qualifying production costs, making it a significant financial opportunity for productions of all sizes.

The scheme operates on a simple principle: support those who are actively creating and delivering theatrical content. Unlike speculative investments or later commercialisation activities, TTR focuses on the companies that are rolling up their sleeves and making productions happen.

Who is Eligible for TTR?

Qualifying Productions

For your production to qualify for TTR, it must meet three essential criteria:

1. Type of Production: Your production must be a play, opera, musical, or other dramatic piece that tells a story, or a ballet. The content should predominantly revolve around storytelling through performers. Contemporary ballets will even qualify.
2. Public Performance Requirement: The production must be intended for live performance to paying members of the general public or provided for educational purposes.
3. Core Expenditure Requirements: This is where recent changes have made the scheme more accessible:

• For accounting periods ending before 1 April 2024: At least 25% of core expenditure must be European
• For accounting periods ending on or after 1 April 2024: At least 10% of core expenditure must be UK-based

Qualifying Companies

Your company must meet specific criteria to claim TTR:

• Active Creative Role: You must be actively involved in producing, running, and closing the theatrical production. This means playing an active role in planning and decision-making, negotiating contracts, and making effective technical or artistic contributions to the production.
• UK Tax Registration: Your company must be registered for UK Corporation Tax.

How Does Theatre Tax Relief Work?

Understanding the different phases of production is crucial for maximising your TTR claim, as only certain phases qualify for relief.

The Four Stages of Production

1. Development Phase: This speculative stage involves determining commercial feasibility. Costs incurred during development are not eligible for TTR. This phase ends when the production is "green-lit" and you decide to proceed.
2. Production Phase: This is where the magic happens for TTR purposes. Once your production is green-lit, costs become eligible. This phase includes:

• Production team meetings
• Casting and script readings
• Rehearsals
• Costume design and set construction
• All activities that transform the idea into a performance-ready production

3. Running Phase: Unfortunately, most running costs are not eligible for TTR. This includes ongoing salaries, theatre rent, and maintenance costs. However, exceptional running costs involving substantial reworking (like major recasting or set redesign) may qualify.
4. Closing Phase: Costs associated with closing the production, such as striking sets, storage, or disposal, are eligible for TTR.

Qualifying Expenditure Breakdown

Eligible costs include, but are not limited to:

• Cast and crew salaries (during production and closing phases)
• Set design and construction
• Costume design and creation
• Rehearsal space rental
• Technical equipment
• Script development (production phase only)

Touring vs. Non-Touring Productions

The scheme recognises that touring productions face additional costs, offering higher relief rates.

Touring productions can surrender their losses at a 50% rate before 1 April 2025, and at 45% thereafter.

Non-touring productions surrender their losses at a 45% rate before 1 April 2025, and at 40% thereafter.

A production qualifies as "touring" if it meets either:

• At least 6 separate performance premises planned from the start, or
• At least 14 planned performances across 2 or more separate premises

Practical Benefits of Claiming TTR

Improved Cash Flow

TTR can provide substantial cash injections for loss-making productions. Unlike many tax reliefs that only reduce future tax bills, TTR offers direct cash payments through the payable tax credit system. This means you can receive money back even if your production doesn't generate sufficient profits to offset against Corporation Tax.

Increased Creative Risk-Taking

With TTR reducing the net cost of production, companies can afford to take more creative risks. Whether it's investing in more elaborate set designs, extending rehearsal periods, or exploring innovative staging techniques, TTR provides the financial cushion that enables artistic ambition.

Financial Stability During Uncertain Times

The theatre industry is inherently unpredictable, and TTR provides a valuable safety net. By reducing the actual cost of production, the scheme helps companies weather poor box office performance or unexpected costs, contributing to long-term business sustainability.

Tips for Maximising Your TTR Claim

Work with Specialists

TTR legislation is complex, and the potential savings are significant enough to justify professional support. Specialist tax advisors with creative industry experience can help you:

• Identify all eligible costs
• Structure your productions to maximise relief
• Navigate the increasingly complex reporting requirements
• Handle HMRC submissions and any subsequent enquiries

Plan for TTR During Budgeting

Don't treat TTR as an afterthought. Build it into your financial planning from the beginning by tracking eligible and ineligible costs separately.

You may wish to consider the structure of your company setup to maximise benefit; some companies see successes by using Special Purpose Vehicles for individual productions. SPVs allow accurate cost and revenue allocation, simplify HMRC reporting and maximise TTR benefits for loss-making productions.

Maintain Detailed Records

HMRC compliance checks are becoming more frequent across creative tax reliefs. Ensure you maintain comprehensive records including detailed breakdowns of all production costs, evidence of your active role in the production, documentation of where services were provided and consumed (to prove you meet the EEA or UK requirements) and contracts and invoices supporting your claims.

Conclusion

With recent changes making the scheme more accessible and generous rates available through March 2025, there's never been a better time to explore what TTR can do for your business.

The scheme isn't just about reducing costs – it's about enabling creativity, supporting risk-taking, and building sustainable theatre businesses. Whether you're a small independent company or a larger production house, TTR can provide the financial foundation that allows artistic vision to flourish.

Ready to explore your TTR opportunities? The first step is consulting with a qualified tax advisor specialising in creative industry reliefs.

At Myriad, we have experience across all forms of creative tax relief, including TTR. Get in touch with our team to discuss your production in greater detail.