TTR50080 - Eligible expenditure: UK expenditure

The amount of Theatre Tax Relief (TTR) to which a theatrical production company is entitled is determined听by the amount of core expenditure which is also UK expenditure.听

UK expenditure is defined as: 鈥榚xpenditure on goods and services which are used or consumed in the United Kingdom鈥�.听

The nationality of those providing the goods and services has no bearing on whether the expenditure qualifies as UK expenditure. The 鈥榰sed or consumed鈥� test does not focus on the supplier of goods and services but instead concentrates on the recipient or customer as the means of determining听UK expenditure.听

In order to听determine听whether an item of expenditure incurred in relation to a theatrical production should be treated as UK expenditure, it is necessary to establish:听

  • the nature of the specific goods or services in question; and听

  • the place where the recipient uses or consumes those goods and services.


Rehearsals听

HMRC will consider expenditure on rehearsals held in the UK to be UK expenditure听regardless of where the theatrical production itself is held.听

Any sets, props and costumes used in those rehearsals would also be UK expenditure.

Royalties and similar fees听

Royalties听and听fees follow the same principle. Expenditure听will qualify for relief to the extent that听production activities such as rehearsals take place in the UK.听

NB: royalties paid to actors or other staff who contribute to both core activities and non-core activities听should be apportioned to exclude any amounts which are not core expenditure听(promotional activities, for example). This matches the treatment of 鈥榦rdinary鈥� fees paid to these parties e.g. wages听(TTR50115).

Fees paid to actors, crew听and other staff听

Fees paid to staff are based on where their services are performed, not where they are听resident for tax purposes. Therefore听fees paid for production activities in the UK will qualify but fees paid for production activities听abroad will not.听Where production activities are split between the UK and overseas, fees paid should be apportioned on a just and reasonable basis.听

Take 补肠迟辞谤蝉鈥� fees for rehearsals as an example. It would be reasonable to multiply the fee for all rehearsals by听听

the number of rehearsals held in the UK 梅 the total number of rehearsals听

to give a fee based on the proportion of UK rehearsals. Apportionment could also be done on a time basis 鈥� days spent rehearsing in the UK versus days spent rehearsing overseas, for instance.听

For administrative ease, the combined total of the fees paid to all staff听can be apportioned using the same basis, rather than calculating the proportion for each person individually and adding them together.听However, this should only be done if the proportion does not substantially differ听between staff.听

Note that听actors鈥� fees paid for performances relate to the running phase of the production and are not core expenditure, regardless of whether the 补肠迟辞谤蝉鈥� services are used or consumed in the UK (see TTR50115).听