Orchestra Tax Relief (OTR) provides valuable corporation tax support for production companies involved in qualifying orchestral concerts. The relief recognises the cultural value of orchestral performance and can help support the cost of qualifying productions across the UK.
For orchestras, ensembles, groups, bands and charitable organisations, OTR can provide either an additional deduction against taxable profits or, where the production is loss-making, a repayable credit. However, eligibility depends on the nature of the concert, the role of the production company and how costs are recorded.
What is Orchestra Tax Relief?
OTR is a corporation tax relief available to qualifying orchestral concerts. It provides an additional deduction against taxable profits, and where the production is loss-making, the loss may be surrendered to HMRC for a repayable credit.
Each concert is generally treated as a separate trade, although an election can be made to treat a number of concerts as one series. This can be useful where concerts form part of a wider programme of activity, but the election must be made within the required timeframe.
What concerts qualify?
A qualifying concert must be performed wholly or mainly by instrumentalists in an orchestra, ensemble, group or band. The instrumentalists must be the main focus of the concert.
The concert must have at least 12 instrumentalists, and the majority of the instruments must not be electronically or directly amplified. The production must be intended to be performed live for paying members of the public or for educational purposes, and at least 10% of core expenditure must relate to activities taking place in the UK
Concerts will not qualify if they include a competition, or if the main purpose is to make a recording or advertise goods or services.
Who can claim?
A claim must be made by the production company. This is the company that is responsible for producing, running and closing the production, is actively involved in decision-making, makes creative, technical and artistic contributions to the concert, and is responsible for engaging performers and directly negotiating, contracting for and paying for rights, goods and services.
The production company may be commercial or charitable. Although many charitable organisations are exempt from tax on much of their income, they can still be within the charge to corporation tax and may therefore be able to benefit from OTR. In a co-production, only one company can claim the relief.
What costs can be included?
A qualifying production has four phases: development, production, running and closing. Only core expenditure incurred in the production phase and certain closing expenditure may qualify for relief. Development expenditure does not normally qualify unless it is subsequently reclassified as production expenditure once the production receives the go-ahead.
Qualifying costs may include performers' fees, music rights, venue and instrument hire, and certain travel and subsistence costs directly related to the production, provided they form part of qualifying core expenditure.
Marketing, financing, storage and legal fees are excluded. Income attributable to the separate trade may include box office receipts and other production-related income, depending on the nature of the arrangements.
How much relief is available?
The value of the relief will depend on the level of qualifying expenditure, the amount of qualifying core expenditure relating to activities taking place in the UK and whether the production is profit-making or loss-making.
The additional deduction is the lower of 80% of qualifying core expenditure and the expenditure used or consumed in the UK. Where the company has a loss, the amount that can be surrendered for a repayable credit is restricted to the adjusted loss.
The repayment rate for qualifying orchestral concerts is 45%. The temporary higher rate of 50% for productions commencing on or after 27 October 2021 ended on 31 March 2025.
What should production companies do next?
Production companies should assess eligibility early, particularly where a programme includes multiple concerts or may require an election to treat concerts as one series. Clear records of qualifying expenditure, income and production phases will be important in supporting the claim.
The OTR claim must be submitted to HMRC as part of the company tax return. For all claims submitted after 1 April 2024, an additional information form must also be submitted in support of the claim.
We’re here to help
Our creative sector tax specialists help production companies assess whether Orchestra Tax Relief applies, identify qualifying expenditure and prepare claims that are ready for HMRC review. If you would like to discuss OTR or wider creative sector tax reliefs, please get in touch with our specialist team or your usual Azets adviser