Orchestra Tax Relief

Orchestra Tax Relief (OTR) is a creative industry tax relief incentive funded by the UK government.

OTR supports UK Orchestra Production Companies by offering them a tax rebate against the money they spend on producing the concert, as well as travel to and from a venue that is not the company's usual venue.

To claim Orchestra Tax Relief, each concert is deemed a separate trade. However, a company may elect for a series of concerts to be treated as a single concert and, as such, a single trade.

It sets out the income and expenditure to be included in determining the profits and losses of that trade. The relief is then given through an additional deduction relating to the core expenditure in calculating its taxable profits.

Where the additional deduction results in a loss, this loss can be surrendered for a payable tax credit.

You can claim orchestra tax relief on your concert/performance if:

• It is an orchestral concert.
• It is intended to be performed live to paying public members or provided for educational purposes.
• It has a minimum of 12 instrumentalists.
• The majority of the musical instruments are not electronically amplified.
• At least 25% of the core expenditure on the concert must be European expenditure.

If you are applying for a series of concerts, in addition to the above, they will qualify if:

• The same production company produces each concert in the series.
• It is intended that all of the concerts in the series are to be performed live to paying members of the public or to be provided for educational purposes.
• The company has made the appropriate election to HMRC.

Orchestra Tax Relief is claimed by the Orchestra Production Company for each accounting period through the Corporation Tax Self-Assessment process (CTSA). The orchestra production company must complete the relevant section on the Corporation Tax Return (CT600).

The tax return must also be accompanied by the required supplementary information, which includes details of venues used as well as detailed analysis of expenditure upon which the relief is to be claimed.

You must provide a statement that shows all core expenditure broken down by category and by UK and non-UK spending.

You’ll need to calculate if the concert has made a profit or loss and determine whether any loss can be surrendered for a cash tax credit.

HMRC has a specific approach for calculating the taxable profit or loss of an orchestra production trade.

An Orchestra Production Company (OPC) is the company that puts on the concert. The purpose of the tax relief is to support orchestral performances.

To qualify as an Orchestra Production Company, the company must:

• Put on the concert from start to finish.
• Employ the performers.
• Be actively engaged in decision-making, negotiating contracts, and making payments for goods and services.
• Make an effective creative, technical, and artistic contribution to the concert.

Core expenditure is expenditure incurred on producing the concert up to the performance and any travel to and from a venue that is not the usual venue of the company.

Core expenditure does not include any expenditure relating to developing the production, non-producing activities such as financing, marketing and legal costs, or the performance itself.

For example, certain costs may need to be apportioned between rehearsals and the performance itself.