Once you have allocated your costs across each production, the next question is how much of that spending qualifies for Theatre Tax Relief. The answer: only your core expenditure, the money spent producing and closing a show. Get that right and the relief is generous, with permanent rates of 40% for non-touring and 45% for touring productions since 1 April 2025.
In short: You can claim Theatre Tax Relief on your core expenditure, the costs of producing and closing a production, but not on marketing, financing, legal, storage or ordinary running costs. Each show is treated separately, at least 10% of its core costs must be UK expenditure, and relief is worth up to 40% (non-touring) or 45% (touring).
Key takeaways
- Theatre Tax Relief is permanent at 40% (non-touring) and 45% (touring) since 1 April 2025
- Only core expenditure (producing and closing the show) qualifies; non-core costs do not
- A production has four phases: development, production, running and closing. Only production and closing are core
- Costs that cross phases must be split on a just and reasonable basis
- At least 10% of core expenditure must be UK expenditure; the additional deduction is the lower of 80% of total core costs or 100% of UK core costs
What is Theatre Tax Relief and how much is it worth?
Theatre Tax Relief (TTR) is a corporation tax relief for theatrical production companies. You claim an additional deduction against the profits of each production’s separate trade, and if that produces a loss, you can surrender it for a payable cash credit, even if the company is not yet profitable. Since 1 April 2025 the rates are permanent at 40% for non-touring productions and 45% for touring ones, rates SOLT welcomed as “transformative for the sector”.
What costs qualify for Theatre Tax Relief?
Your core expenditure. Under the Corporation Tax Act 2009, core expenditure is spending on the activities involved in producing and closing a production. In practice, that typically includes:
- performers’, crew and creative fees for the production phase
- set, costume, lighting and sound design and build
- rehearsal costs
- closing costs such as striking and disposing of the set
These are the costs you allocated to each show in the first place, which is why clean cost allocation comes first.
What costs cannot be claimed?
Non-core costs. HMRC’s guidance lists these as ineligible:
- marketing, publicity and promotion
- financing, interest and other finance costs
- legal fees and, in most cases, accountancy and audit fees
- storage of sets and costumes
- ordinary running costs once performances begin
Development costs are speculative and only qualify once the show is confirmed and they relate directly to the production phase.
How do the four phases affect what you can claim?
A lot. HMRC splits every production into four phases: development, production, running and closing. Only the production and closing phases are core. Development is generally excluded (unless the show goes ahead and the cost relates to production), and ordinary running costs from the first public performance are not core.
Where a single cost spans phases, you split it on a just and reasonable basis, usually by time.
Worked example: a producer works two months in development, eight months in production and two months running the show. You could treat 8 of the 12 months, around 67%, as core production expenditure, keeping a record of how you reached that split.
How do you work out and claim the relief?
For each production, identify its core expenditure, apportion any cross-phase costs, and confirm at least 10% is UK expenditure (spending on goods or services used or consumed in the UK). The additional deduction is the lower of 80% of total core expenditure or 100% of your UK core expenditure.
You claim through your Corporation Tax return (CT600), and for claims made on or after 1 April 2024 you must also submit an additional information form breaking down your core expenditure. You have two years from the end of the accounting period to claim. Because the numbers rest on how you have categorised and split your costs, it pays to get the allocation right first. If you are unsure how a specific cost should be treated, check what applies to your production or speak to us and we will confirm your position.
How Atek can help
Working out what qualifies, and evidencing it, is where a specialist earns their keep. At Atek, we help theatre companies:
- Identify core expenditure correctly for each production
- Apportion shared and cross-phase costs on a just and reasonable basis
- Prepare and submit Theatre Tax Relief claims, including the additional information form
- Make sure you claim everything you are entitled to, and nothing you are not
Start with clean, show-by-show costs (see our guide to Allocating Costs Across Theatre Productions) then let us handle the claim. For more on qualifying spend, see our guide to eligible expenses for Theatre Tax Relief and our quick guide to Theatre Tax Relief.
Get in touch with Atek today and we will make sure your productions claim everything they should.
Through your company’s Corporation Tax return, with an additional information form breaking down core expenditure for claims made on or after 1 April 2024. You have two years from the end of the accounting period.
No, but at least 10% of a production’s core expenditure must be UK expenditure (goods or services used or consumed in the UK) for the production to qualify.
Since 1 April 2025 the permanent rates are 40% for non-touring productions and 45% for touring ones. Loss-making productions can surrender losses for a payable cash credit at those rates.
No. Marketing, publicity, financing and ordinary running costs once the show opens are all non-core and do not qualify. Only production and closing costs count.
Core expenditure is the money you spend producing and closing a production: performers and crew, set, costumes, lighting, sound, rehearsals and striking the set. It excludes marketing, financing, legal, storage and ordinary running costs.
Cloud accounting with tracking categories, such as Xero, lets you tag every cost to a production and report per show. The discipline of consistent tagging matters more than the specific tool.
Usually by time. Estimate the proportion of the person’s time each production takes and split their cost the same way, keeping a simple record of how you reached the figures.
Any method that reasonably reflects how the cost was used, applied consistently: time spent, number of performances, space used or headcount. The key is that it is sensible and you can evidence it.
Yes. For clear management accounts and for tax, each production needs its own costs. Because HMRC treats every show as a separate trade, a single combined budget will not give you, or HMRC, the numbers you need.
