Changes to creative sector tax relief claims

Empty theatre auditorium

27th February 2024

Last year, HMRC announced that it would change the process for making creative sector tax relief claims. Although the change was announced last summer, guidance was only issued by HMRC on 19 February 2024 leaving a very short window for organisations to be compliant with the new rules.

The changes relate to Theatre Tax Relief, Orchestra Tax Relief, and Museums and Galleries Exhibition Tax Relief, and will apply from 1 April 2024.

Under the new rules, all claims will need to be accompanied by an additional online form. The new online form will need to be submitted in advance of the tax relief claim itself.

The new online form requires a lot of detailed information, which many organisations will already include in their accompanying tax computation. However, this information is now required in a specific format as prescribed by HMRC.

A separate form is required for every production, exhibition or concert, adding considerably to the administrative burden of submitting a claim. As a comparison, for R&D relief (the first of the reliefs to introduce this type of form), companies with multiple projects are able to cap the number of forms they submit, providing the forms cover at least 50% of the qualifying expenditure.

Given the overall complexity of the new forms and the lack of flexibility for those larger organisations with multiple productions or exhibitions, we will be speaking with HMRC to streamline and improve this over the coming months.

However, if you are planning on making a claim for one of these reliefs, we would recommend this is prioritised and submitted pre-1 April 2024, in order to minimise the additional work arising from these changes and the related additional costs.

We are working with our existing clients to expediate as many claims as possible prior to the April change, but if your organisation will be affected by these changes, then we can assist with navigating the new requirements and easing the additional compliance burden these changes bring.

If you would like to know more about these changes, or about making creative sector tax relief claims, please contact Alice Palmer, Senior Manager, or Sally Gatward, Assistant Manager, or your usual haysmacintyre contact for more information.

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