Theatre tax relief – does your production qualify?

Actor Giving Speech Shakespeare Open Air Theater Shakespeare Performance.

Finance Act 2014 introduced a new regime for the taxation of Theatrical Production Companies (TPCs) that claim a new relief for the theatre industry: Theatre Tax Relief (TTR).

The legislation provides specific rules for relief on theatrical productions, including touring productions, in addition to setting out how the taxable profits and losses of those productions shall be calculated.

Tax treatment

For tax purposes only, the legislation:

  • deems that each production is a separate theatrical trade with a start and end date separate to that of the company
  • describes what expenditure is eligible for additional tax relief and circumstances where there are exceptions to the normal rules for income and expenditure, and
  • restricts the use of losses associated with that separate theatrical trade in certain circumstances.

Theatre Tax Relief (TTR)

TTR is available to TPCs engaged in the making of:

  • theatrical production (TTR40020)
  • for live performance to paying members of the general public or provided for educational purposes (TTR40030), and
  • at least 25% of the core expenditure (TTR50010) is incurred on goods or services provided from within the European Economic Area (EEA) (TTR50050).

Those TPCs that are entitled to TTR can claim:

  • an additional deduction in computing their taxable profits (TTR55010), and
  • where that additional deduction results in a loss, to surrender losses for a Theatre Tax Credit (TTC) (TTR55100): a payable tax credit due to the TPC.

Theatre Tax Credit rates

The TTC rates are:

  • 25% for touring productions, and
  • 20% for all other qualifying productions.

Both the additional deduction and the Theatre Tax Credit are calculated on the basis of core expenditure up to a maximum of 80% of the total core expenditure by the TPC.  Core expenditure is that expenditure directly incurred in producing the production and closing the production.

According to The Stage ..

Productions only qualify if they are live performances to paying members of the public, and aim to make a profit.

Productions performed in schools are the only exception to this, and are still eligible for the tax relief as they are for “educational purposes”.

Tax relief can be claimed on performances that are live streamed as part of schemes such as NT Live, as long as the company’s main aim is to stage live performances for paying, present audiences.

Likewise, performances that are recorded are also eligible as long as the recording is not the aim of the production’s overall run.

Circus productions are only eligible if they are “scripted”, “dramatic” and the performers “play a role”, rather than being simply “a display of athleticism, skill or strength”.

Other art forms that are eligible include ballet, contemporary ballet which incorporates classical ballet, and other dance performances that are “dramatic productions”.

HMRC has a specialist unit, the Creative Industries Unit, to deal with claims to Theatre Tax Relief (TTR) and the other creative industries tax reliefs (for example, film and video games).

The unit can be contacted by email at or by telephone on 03000  510191.  Alternatively, the unit can be written to using the following correspondence address:

The Creative Industries Unit
Manchester Incentives & Reliefs Team
Local Compliance S0717
PO Box 3900
G70 6AA

Rent a Room and earn £7,500 tax free

Fotolia_45741373_XS cash

The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.

You can let out a room or an entire floor.

How it works

The tax exemption is automatic if you earn less than the threshold. This means you don’t need to do anything.

You must complete a tax return if you earn more than the threshold. From 6 April 2016, this is £7,500. For the 2015 to 2016 tax year, the threshold was £4,250.

When you can use the Rent a Room Scheme

You can use the scheme if:

  • you let a furnished room to a lodger
  • your letting activity amounts to a trade, for example, if you run a guest house or bed and breakfast business, or provide services, such as meals and cleaning

When you can’t use the Rent a Room Scheme

You can’t use the scheme if the accommodation is:

  • not part of your main home when you let it
  • not furnished
  • used as an office or for any business – you can use the scheme if your lodger works in your home in the evening or at weekends or is a student who is provided with study facilities
  • in your UK home and is let while you live abroad
  • the whole of your home, rather than a part of it


SpareRoom, the UK’s busiest flatshare site. Every three minutes, someone finds a flatmate with SpareRoom.

The table below shows the change in monthly rents between 2009 and 2014 according to Spareroom:

Ave Rent 2009 (£) Ave Rent 2014 (£) Rental Increase %
London & suburbs £549 £691 25.8%
East Anglia £345 £398 15.4%
East Midlands £314 £353 12.6%
North England £304 £334 9.8%
North West England £316 £359 13.8%
South East England £390 £449 15.2%
South West England £347 £394 13.7%
West Midlands £334 £366 9.7%
Yorkshire & Humberside £312 £347 11.3%
Northern Ireland £238 £260 9.5%
Scotland £325 £403 24.2%
Wales £302 £332 9.9%
UK £500 £550 10%

Are you PSC ready?

I want you

From the 30th June 2016 all companies will be required to prepare a PSC Register.

You need to start keeping a register of your people with significant control (PSC).

A PSC is someone in your company who:

  • owns more than 25% of the company’s shares
  • holds more than 25% of the company’s voting rights
  • holds the right to appoint or remove the majority of directors
  • has the right to, or actually exercises significant influence or control
  • holds the right to exercise or actually exercises significant control over a trust or company that meets any of the other 4 conditions.

You’ll need to keep your PSC as part of your company register, as these need to be available for inspection.


Failure to comply will result in fines and up to 2 years in prison!

Brexit – ‘independence day’ or ‘the apocalypse’


Before the vote we had lots of warnings:

  • Recession
  • Job Losses
  • Emergency Budget
  • Exchange rates crisis
  • Stock Market crash
  • Trade Deal problems (back of the queue!)
  • House Price Boom expected to end and house prices will fall 18%
  • £30bn of tax increases
  • Increased fuel prices
  • The cost of using mobiles in Europe could increase
  • EU Travel will cost more

I have to say it felt like everyday there would be a new and bigger more extreme warning of impending doom.

I think the Remain Camp over did the disaster stories and that lost them credibility.

The Leave Campaigners put forward a much better argument as demonstrated in this movie

So what happens next

So far ….

David Cameron has resigned and his successor is widely tipped to be Boris Johnson.

The Labour Leader Jeremy Corbyn has had a number of key members of the shadow cabinet resign and there could be a leadership challenge

The Scottish parliament want to veto the Britain’s Exit which could lead to Scotland having another vote on independence

Its expected that it will take up to 2 years to exit the EU and the UK vote could lead other countries to consider referendums

Its going to be a bumpy ride so prepare yourself now!

HMRC Directors Loan 2016 Rules

Young woman with checklist over shoulder shot

The latest version of the Directors Loan Tool Kit for 2015-16 was published in May 2016, official the guidance is voluntary, but I am not sure that tax inspectors will consider as voluntary!

Here is a link to the full tool kit

Click to access 2015-16_DLA_Toolkit_rev.pdf

Here are some things to watch out for when preparation your accounts




Space Accounting – Are you ready for take off?

Space shuttle taking off on a mission. Elements of this image furnished by NASA

Space flights could soon become available to everyone.

According to Virgin Galatic

…..The roughly 700 Virgin Galactic future astronauts who have already paid deposits for their flights on SpaceShipTwo come from more than 50 different countries, about half of which have never before sent a human to space. They span in age from under 10 to over 90 years of age. They practice many professions and speak many languages.

In the near future, our astronauts will share their version of the Overview Effect with audiences who have never dreamed of hearing it and who will go on to be the innovators, inventors, and entrepreneurs of tomorrow. Some of them may even earn the scholarships offered by the Virgin Galactic Future Astronaut community through Galactic Unite.


Space flights are an emerging industry and are expected to become dominate in the coming decades.

Many other opportunities are also under consideration including manufacturing in space! and possible mining work taking place on the Moon and Mars

What tax jurisdiction do space activities fall under? What accounting standards do we use in space? Which accountant are we going to send to audit the mining operation on the moon?

It will take time to develop Internationally Accepted Accounting Standards for Space. It will take time to solve the accounting problems of space travel. And it will take time to train the next group of auditors to be astronauts. I encourage my fellow CPAs to get involved in the commercialization of space and start a space department at your firm. We should be working together now to develop solutions to these problems and enable the exploration of a new frontier. [accounting today Article By Zach De Gregorio ]

Things an accountant should do every day

junge frau lernt für eine prüfung

Things are changing fast, we now live in a cloud based technology driven world.

Accountants are changing too, clients now:

  • Use cloud based systems to enter transactions
  • Raise invoices online and get paid online
  • Connect their bank accounts to their software
  • Attach copies of receipts to transactions

Accountants should be working on a daily basis with their clients in areas such as…

Business Strategy

Your accountant should be a trusted advisor to your business. Accountants are often aware of business trends, legislation and new technologies so they can work with you to find the best ways to achieve your goals.

Tax Planning

Just processing the numbers isn’t enough, your accountant should be exploring the tax consequences of your proposed decisions, for example

  • the tax payable on an overdrawn Directors Loan Account
  • the benefits of low CO2 emission cars
  • the tax differences between buying and leasing equipment
  • owning investment property personally or in a company
  • Business Acquisition and Disposal tax issues

Regular Calls, E Mails and Meetings

Accountants haven’t been good at this in the past but they need to become accessible to clients. Its no good just having contact once a year to sign off the accounts. For accountants to become business partners clients need to be free to ask them anything whenever they need help or advice. Providing a personal tailored service is a priority and clients now expect it.

Accountants need to respond quickly to clients requests, waiting days for a reply won’t do!

When do you need a certificate for 5% VAT on building work?

Interior construction site

Building work can be charged at 5% in the following circumstances:

  1. Renovating residential property that has been empty for more than 2 years
  2. Where the number of dwellings is being increased such as converting a house into flats
  3. Converting a commercial building into residential
  4. Converting a house into an HMO

VAT Notice 708 has the exact details and whether or not the 5% rate can be used is a matter of fact not opinion. HMRC will not give specific clearance, they will refer you to the rules and ask you to check the rules with your builder for your project.

The property owner doesn’t issue a certificate (as would be needed to Zero Rating), its for the builder/developer to determine whether and on what the 5% VAT rate can be applied.

The only exceptions (when a reduced rate certificate would be needed) are

(a) a home or other institution providing residential accommodation for children

(b) a home or other institution providing residential accommodation with personal care for persons in need of personal care by reason of old age, disablement, past or present dependence on alcohol or drugs or past or present mental disorder

a hospice

residential accommodation for students or school pupils

residential accommodation for members of any of the armed forces

a monastery, nunnery or similar establishment or

an institution which is the sole or main residence of at least 90 per cent of its residents

and will not be used as a hospital, prison or similar institution or an hotel, inn or similar establishment. blog smashes through 300,000 hits!

Blog 300000 has now had over 300,000 views, nearly 200,000 unique visitors and on Sunday reached a new daily views high of 1,396 views in a single day!

I think that’s pretty impressive for a Tax and Accounting Blog!

Looking at phone

We have over 7,000 followers and our most popular day is Tuesday and the best time is 1pm, which is interesting as last year it was Wednesday at 10am.

Our top 3 blogs of all time are:


January 2016 has had the highest monthly number of hits at 12,000

So why do people read my blog?

  1. Useful Content – I learned a long time ago that if you want followers and readers you have to write about things that will interest as wider audience as possible. My blog is about Accounting and Tax, which you might think is boring but it does affect everyone, we all pay tax! and there is plenty to blog about.
  2. Accurate Content – Its important to get the content right but even if you do make a mistake you can bet your life someone will tell you. Fortunately most readers are very helpful and will also contribute suggestions.
  3. Regular Posts – you have to post regularly, I post 2 or 3 times a week, I prepare them in advance and schedule them
  4. Variety – I try cover a wide variety of topics and my audience appreciate it, I even get special requests
  5. Pictures – Blogs without pictures, charts and graphics are boring
  6. Share – Post your blogs every where on Social Media and encourage others to do the same
  7. Pick a good title – The title will be found by search engines so try to think about what someone might search for
  8. Video – You Tube has plenty and most people would love you to link to their video as it will increase their hits as well as yours
  9. Infographics – I love infographics and I try to create my own when I have time
  10. Keep it simple – Lets face it Tax is complicated, so I try not to make the blogs too complicated otherwise I will lose followers


How will the Residential Nil Rate Band (IHT) work? 5 key points

Contemporary house with pool

The new rules come into force in April 2017.

The current nil rate band for Inheritance Tax is £325,000. Which can be transferred between spouses, so basically £650k for a couple.

The maximum amount of RNRB per person will be phased in so that it is:

  • £100,000 for 2017 to 2018
  • £125,000 for 2018 to 2019
  • £150,000 for 2019 to 2020
  • £175,000 for 2020 to 2021

It will then increase in line with CPI for subsequent years.

Key points to note:

  1. It is transferable between spouses – A claim will have to be made on the death of a person’s surviving spouse or civil partner to transfer any unused proportion of the additional nil-rate band unused by the person on their death, in the same way that the existing nil-rate band can be transferred.
  2. The qualifying residential interest will be limited to one residential property but personal representatives will be able to nominate which residential property should qualify if there is more than one in the estate. A property which was never a residence of the deceased, such as a buy-to-let property, will not qualify.
  3. If the net value of the estate (after deducting any liabilities but before reliefs and exemptions) is above £2 million, the additional nil-rate band will be tapered away by £1 for every £2 that the net value exceeds that amount. The taper threshold at which the additional nil-rate band is gradually withdrawn will rise in line with CPI from 2021 to 2022 onwards.
  4. You need to be a linear descendant to benefit – A direct descendant will be a child (including a step-child, adopted child or foster child) of the deceased and their lineal descendants.
  5. Downsizing is catered for – legislation in Finance Bill 2016 will provide that where part of the main residence nil-rate band might be lost because the deceased had downsized to a less valuable residence or had ceased to own a residence on or after 8 July 2015, that part will still be available provided the deceased left that smaller residence, or assets of equivalent value, to direct descendants. However, the total amount available will not exceed the maximum available residence nil-rate band. The technical details of how the additional nil-rate band will be enhanced to support those who have downsized or ceased to own their home will be the subject of a consultation to be published in September 2015 ahead of the draft Finance Bill 2016.