Creative Sector Tax Reliefs: How Are They Working Out?

Creative sector tax reliefs (CTR) have been a significant lifeline for the UK’s cultural sector. Since their introduction, they’ve delivered nearly £1.2 billion in support across theatre, orchestras and museums and provided the arts sector with invaluable support during the pandemic.

But with rates now changing, it’s worth taking stock of what they’ve achieved. Arts Council England, in collaboration with Nordicity, Ipsos and Saffery, have recently published the Cultural Tax Reliefs Impact Review to do just that.

What are the Creative Sector Tax Reliefs?

Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR) and Museums & Galleries Exhibition Tax Relief (MGETR) were introduced between 2014 and 2017. They sit alongside other creative sector incentives like the Video Games Expenditure Credit and Audio-Visual Expenditure Credit, together forming a broad package of government support for the UK’s creative industries.

Each scheme works in a similar way: eligible organisations can either reduce their corporation tax bill or, if loss-making, surrender those losses for a cash credit. The rate you receive depends on which scheme you’re claiming under, whether your production tours, and your accounting period.

Learn more about calculating a creative tax relief claim here: How to Calculate Creative Tax Reliefs

What are Creative Sector Tax Reliefs worth?

The enhanced rates introduced during the pandemic are being phased down for accounting periods beginning on or after 1 April 2025.

CTR are cumulative, based on the trade of the specific show. Each production has its own trade that is reported separately, for which you can claim annually or at the end of the production.

For example, a theatrical production started in 2023 that is still currently touring could be ongoing in 2026, therefore under the old rates.

It’s worth checking your next accounting period start date. If it falls on or after 1 April 2025, the new rates apply to that whole period, so you won’t be able to blend the old and new rates within a single claim.

For the administrative work required to evaluate your costs and prepare your claim, it’s often a no-brainer. Making a claim needs only an accurate assessment of the production’s core cost and submission through your Corporation Tax return, alongside your Additional Information Form.

Theatre Tax Relief

The rates that you can surrender your losses at will decrease for accounting periods beginning on or after 1 April 2025.

• Touring productions: 50% → 45%
• Non-touring productions: 45% → 40%

You can read more about touring versus non-touring relief rates here: Touring vs. Non-Touring Productions: Which Gets More Theatre Tax Relief?

Orchestra Tax Relief

The rates that you can surrender your losses at will decrease for accounting periods beginning on or after 1 April 2025.

• All productions: 50% → 45%

Museums & Galleries Exhibition Tax Relief

The rates that you can surrender your losses at will decrease for accounting periods beginning on or after 1 April 2025.

• Touring exhibitions: 45% → 40%
• Non-touring exhibitions: 40% → 35%

How much have these reliefs delivered so far?

It’s easy to underestimate just how impactful these schemes have been. As of April 2024, the cumulative totals are:

• £892 million disbursed through Theatre Tax Relief since 2014
• £164 million through Orchestra Tax Relief since 2016
• £115 million through Museums & Galleries Exhibition Tax Relief

That’s close to £1.2 billion invested into the UK’s cultural sector—a significant figure by any measure, and absolutely crucial to the arts during Covid.

What difference have the reliefs actually made?

The numbers above tell you what’s been paid out, but what has that money actually achieved? Research into the impact of creative sector tax reliefs paints a compelling picture.

Financial impact

Organisations claiming CTR earned 37% more income annually compared to those that didn’t, equating to an average of £44,200 in additional earned income per organisation, per year. The international picture is even more striking: CTR claimants earned 162% more from international activity than non-claimants, or an extra £16,500 per year on average.

For Theatre Tax Relief specifically, further enhancements have generated £326.4 million in Gross Value Added (GVA) and supported 3,622 jobs. For MGETR, the equivalent figures are £23.9 million GVA and 378 jobs.

Cultural impact

The impact extends beyond the balance sheet. Organisations claiming CTR were able to stage an average of 110 additional performances per year compared to non-claimants, translating to 30,550 more performances made available to the public annually across 279 organisations in the research sample.

CTR claimants also offered 3.8% more concessionary tickets, or around 32 additional discounted tickets per organisation, per year. That’s meaningful for access and inclusion in the arts.

Resilience during the pandemic

Perhaps most tellingly, CTR had a significant mitigating effect during the pandemic. Organisations claiming the reliefs demonstrated greater economic resilience and were able to recover faster, returning to staging performances more quickly and substantially than those that hadn’t claimed. In 2021 and 2022, CTR helped to offset the overall reduction in performances across the sector.

What does this mean for your company?

The rate reductions don’t make claiming less worthwhile; these are still substantial reliefs that can fund productions, protect jobs, and grow your earned income. But it does mean that if you haven’t reviewed your eligibility recently, now is a good time.

If you’re not yet claiming, or you’re unsure whether your current approach is maximising your entitlement, it’s worth getting a second opinion before the new rates kick in. Get in touch with our team to find out where you stand.