OTR70020 - Orchestra Tax Relief: calculation: maximum amount of core expenditure subject to claim
S1217RE Corporation Tax Act 2009
The amount of Orchestra Tax Relief (OTR) available is based on the UK core expenditure of each separate orchestral trade. The Orchestra Production Company (OPC) will receive an additional deduction of up to 80% of the total core expenditure incurred on the production.
An OPC can claim OTR on the lower of:
- 80% of total core expenditure, and
- the actual UK core expenditure incurred.
UK core expenditure is the amount of core expenditure incurred by the OPC that is also UK expenditure. UK expenditure is expenditure on goods or services that are used or consumed in the United Kingdom. See OTR60060 for more detail.
If non-UK core expenditure is not more than 20% of total core expenditure, it will have no bearing on the amount of OTR an OPC can claim.
The amount on which the OPC is entitled to claim an additional deduction under OTR is termed enhanceable expenditure.
Example 1: core expenditure all UK expenditure
An OPC incurs £1m of core expenditure on a concert or series, all of it on goods or services that are used or consumed in the UK.
UK core expenditure is more than 80% of total core expenditure.
The OPC can claim OTR on 80% x total core expenditure. The additional deduction is therefore £0.8m.
Example 2: core expenditure part UK and part non-UK
An OPC incurs £2m of core expenditure on a concert or series, of which £1.25m is UK expenditure. The remainder is incurred on goods or services that are used or consumed in the USA and is therefore non-UK expenditure.
UK core expenditure is less than 80% of total core expenditure.
The OPC can claim OTR on actual UK core expenditure. The additional deduction is therefore £1.25m.
European expenditure
Prior to 1 April 2024, European expenditure was used instead of UK expenditure. Please see OTR60050 and OTR60070 for details.