Cultural tax reliefs are a key UK government initiative supporting and promoting cultural content production, focusing on theatrical productions, orchestral performances, and museum and gallery exhibitions.
In the 2024 Autumn Budget, the Government addressed its commitment to these reliefs by confirming that the previously announced rates for Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR), and Museums and Galleries Exhibition Tax Relief (MGETR) of 40% for non-touring productions and 45% for touring productions and all orchestra productions from 1 April 2025, will become permanent.
Additionally, the budget confirmed that the Museums and Galleries Exhibition Tax Relief will be made permanent, removing its previous sunset clause.
The three main types of cultural tax reliefs are:
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Theatre Tax Relief (TTR)
TTR applies to theatrical productions, including plays, musicals, operas, and ballet performances. Eligibility requires the production to be intended for live performance to a paying audience or for educational purposes.
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Orchestra Tax Relief (OTR)
OTR is designed for orchestras and musical ensembles that provide live performances. Generally, eligible orchestras must have at least 12 instrumentalists in a live production where most instruments are not electronically amplified.
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Museum and Galleries Exhibition Tax Relief (MGETR)
MGETR encourages the development of public exhibitions promoting art, history, and culture. Eligible exhibitions must be intended for public viewing and contain a curated display of objects or works of scientific, historic, cultural, or artistic interest.
Under these reliefs, eligible organisations can claim an additional 80% deduction on qualifying UK production costs when calculating profits or losses for each qualifying exhibit or production.
The tax credit is based on the lower of the total tax-adjusted loss after the 80% deduction or the 80% additional deduction itself.
Example Calculation
A museum organises a touring exhibition with a total core qualifying expenditure of £100,000, set to open on 1 May 2025. As a touring exhibition, it qualifies for the 45% tax relief rate.
- Additional deduction: 80% of £100,000 = £80,000
- Tax credit: 45% of £80,000 = £36,000
The museum would be eligible to receive £36,000 as a tax credit, which can be either repaid or offset against their corporation tax liability.
It’s important to note here that there is a cap on the maximum repayable tax credit for touring exhibitions of £100,000, however in this example, the tax credit falls well within this limit.
Cultural reliefs are particularly valuable for the charity sector. However, understanding the claimants, particularly where more than one entity is involved in the production, and the qualifying expenditure that can be claimed can be challenging.
If you believe you may have a potential claim, please contact our cultural tax relief specialists, Frankie Coombe or James Clark. They can provide their assistance and expertise where needed.
