TTR40020 - Qualifying productions: theatrical production

S1217FA & S1217FB Corporation Tax Act 2009

A production can only be a qualifying production for Theatre Tax Relief (TTR) purposes if it is a theatrical production: a dramatic production or a ballet, that is not specifically excluded by the legislation from being regarded as a theatrical production.

Dramatic production

A dramatic production means a production of a play, an opera, a musical or a relevant dramatic piece (whether or not involving improvisation) in relation to which:

  • each performance in the proposed run of performances is to be live
  • each performance is intended to be given to an audience of no less than five individuals
  • the presentation of live performances is the main object, or one of the main objects, of the company’s activities in relation to the performance

There are two additional requirements around the content of the production.

Primary focus of the dramatic production

The primary focus of the production must be to tell a story or a number of related or unrelated stories, which are told by means of performers playing roles.

Where a production includes some story-telling elements but overall has a more general focus - such as a talent show or variety programme - it will not qualify. The story-telling must be the primary focus of the production.

A performer can be an actor, singer, dancer or other performer.

Main objective of the audience

It must be reasonable to expect that the main objective of the audience is to observe the performance. The audience must not primarily be present for some other reason, such as to perform tasks for which the performance is merely an accompaniment and not the main focus. Some level of audience participation is acceptable, provided that the audience is not mainly present for that reason. 

For example, an escape room which includes staff who are in character would not be a qualifying dramatic production. While the staff’s performances may well be theatrical in nature, the audience’s purpose in attending is to solve the escape room puzzles – the performance only accompanies that experience. By contrast, a traditional pantomime is not prevented from being a dramatic production by this rule. Despite the fact that a pantomime includes audience participation, the main aim of the audience is still to watch a performance by the actors. The audience participation is incidental to observing the performance, not the other way around.

Live performances

At the beginning of the producing phase a company must intend that all or a high proportion of the performances of the production will be live.

A performance is 'live' if it is to an audience before whom the performers are actually present.

Circus production

A circus production may qualify if the above conditions are met.  For example a circus production which is scripted and is a dramatic production and the performers play a role may qualify as opposed to something like a high-wire trapeze performance, which is generally regarded as an indoor sport or a display of athleticism, skill or strength.

Ballet

A ballet is a theatrical production whether or not it is also a dramatic production.

Contemporary ballet

Contemporary ballet productions where there may not necessarily be a dramatic narrative but the production incorporates elements of classical ballet and classical ballet techniques may qualify.

Other dance

All other types of dance, displays of dances, dance competitions, etc will not qualify for relief unless they are dramatic productions or an incidental part of a dramatic production (see Dramatic production above)

Productions not regarded as theatrical

A dramatic production or ballet is not regarded as a theatrical production if:

  • it is produced for training purposes,
  • the main purpose, or one of the main purposes, for which it is made is to advertise or promote any goods or services,
  • the performances are to consist of or include a competition or contest,
  • a wild animal is to be used in any performance,
  • the production is of a sexual nature, or
  • the making of a relevant recording is the main object, or one of the main objects, of the company’s activities in relation to the production.

Wild animals

A wild animal is an animal of a kind which is not commonly domesticated in the British Islands (and in this definition 'animal' has the meaning given by section 1(1) of the Animal Welfare Act 2006).

An animal is used in a performance if the animal performs, or is shown, in the course of the performance.

Productions of a sexual nature

A production is of a sexual nature if the performances are to include any content the nature of which is such that, ignoring financial gain, it would be reasonable to assume the content to be included solely or principally for the purposes of sexually stimulating any member of the audience (whether by verbal or other means).

Examples of performances which would be excluded from TTR would be (but not limited to): lap dancing, pole dancing, table dancing, strip shows, peep shows and live sex shows.  It is also probable that these performances might not constitute the playing of a role and so be excluded from TTR under that rule.

Relevant recordings

Performances recorded as a film (or part of a film) for exhibition at the cinema, or for broadcast to the general public by any means (including television, radio or the internet), are not within the scope of TTR.  Films and television productions may instead qualify for Film Tax Relief or Television Tax Relief (see the Film Production Company Manual or the Television Production Company Manual for more information about those reliefs).

If there is an audience physically present at the recording, the production may qualify for TTR so long as the recording isn't the main object of the performance. When determining the main object of a performance, many factors might be taken into consideration, including the relative size of the audience and the potential sources of income.

It may be that a paying audience was initially intended to be present at a production, but then that plan changes partway through the planning stage. If the performance is still intended to be streamed or digitally broadcast, then this becomes the main object of the performance if there is no live audience, and so it is not an theatrical production and is not eligible for relief. 

In these circumstances, HMRC will treat the production as initially intended as a qualifying production, providing that all the relevant criteria were intended to be met. At the point where the intention has changed, and the relevant recording has become the main object, HMRC will treat the original production as having been abandoned. Expenditure on the production before this point will still be eligible for relief in line with the usual treatment of abandoned productions. The company should retain evidence of the initial intention.

Any expenditure incurred after this point will have been incurred on producing a relevant recording and will not be eligible for relief. It should not be included in the separate trade computation.