Permanent 40% and 45% rates for theatre, orchestra, museum and galleries tax reliefs
Published 6 March 2024
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Who is likely to be affected
Companies claiming tax relief for theatrical productions, orchestral concerts and museum and gallery exhibitions.
General description of the measure
From 1 April 2025, the rates of Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR) and Museums and Galleries Exhibition Tax Relief (MGETR) will be permanently set at 40% (for non-touring productions) and 45% (for touring productions and all orchestra productions). The government will remove the sunset clause for MGETR so that it becomes a permanent tax relief, with no expiry date.
| Rate % | Current Rates | From 1 April 2025 onwards |
|---|---|---|
| TTR: non-touring | 45 | 40 |
| TTR: touring | 50 | 45 |
| OTR | 50 | 45 |
| MGETR: non-touring | 45 | 40 |
| MGETR: touring | 50 | 45 |
Policy objective
The government intends to introduce permanent 45% and 40% rates for the Cultural Reliefs. This is intended to continue to offset current pressures on these industries and boost investment in our cultural sectors.
Background to the measure
TTR was introduced by Finance Act 2014, with an effective date from 1 September 2014, OTR by Finance Act 2016, with an effective date from 1 April 2016, and MGETR by Finance Act (No. 2) 2017 with an effective date from 1 April 2017.
Rates for these cultural reliefs were temporarily increased from 27 October 2021 to help the sector in their economic recovery from COVID-19. The increase was extended for a further 2 years at Spring Budget 2023. The rates were due to taper to 30% and 35% in April 2025.
Detailed proposal
Operative date
This measure will take effect from 1 April 2025.
Current law
The current law is contained in Parts 15C, 15D and 15E of the Corporation Tax Act 2009.
Proposed revisions
Section 1217K of the Corporation Tax Act 2009 will be amended for TTR, section 1217RG of the Corporation Tax Act 2009 for OTR, and section 1218ZCH of the Corporation Tax Act 2009 for MGETR. These amendments will permanently increase the rate of reliefs to 45 and 40% from 1 April 2025. The sunset clause for MGETR will be removed.
Summary of impacts
Exchequer impact (£million)
| 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 | 2028 to 2029 |
|---|---|---|---|---|---|
| — | — | -10 | -60 | -130 | -170 |
These figures are set out in Table 5.1 of Spring Budget 2024 and have been certified by the Office for Spring Budget Responsibility. More details can be found in the policy costings document published alongside Spring Budget 2024.
Economic impact
This measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
There is no impact on individuals as this measure only affects businesses. This measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
It is not anticipated that there will be impacts on those in groups sharing protected characteristics.
Impact on business including civil society organisations
This measure is expected to have a negligible administrative impact on the approximately 1300 companies that claim TTR, OTR or MGETR on an annual basis. One-off costs could include familiarisation with the change. There are not expected to be any further one-off or continuing costs. Customer experience is expected to remain broadly the same as this measure does not alter how businesses interact with HMRC. The measure is not expected to impact civil society organisations.
This measure will simplify the customer experience in future periods as it removes the planned one-year taper and means that the rate will only change once going forward. This means that customers will not need to familiarise themselves with more rates later down the line.
Operational impact (£million) (HMRC or other)
HMRC operational impacts for this change are expected to be negligible.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
This measure will be kept under review through communication with affected taxpayer groups. HMRC will monitor this measure through the analysis of claims data and the publication of summary statistics.
An external review of the MGETR was launched in 2020 and was published in March 2022.
Further advice
If you have any questions about this change, contact Stephanie Martinez at [email protected], Yasmin Achha at [email protected] or Alice Williams at [email protected].