Cultural tax reliefs pay out record £240m

Tax reliefs for theatres, orchestras, museums and galleries amounted to a record £240m for the 2022/23 tax year, according to the latest government figures.

The £240m paid out across the three sub sectors (£178m for theatres, £33m for orchestras, and £29m for museums) represents a more than three-fold increase on the £75m paid out in 2021/22 (£55m for theatres, £11m for orchestras and £9m for museums).

All three sub sectors recorded the highest numbers of claims and relief paid out since the introduction of each scheme, with theatre recording the steepest increase in claims, 50% more than the previous year..

READ MORE:

• Spring Budget: Higher culture tax reliefs made permanent in ‘game-changing’ move
• Budget 2021 doubles creative tax relief rates

Overall A total of £2.2bn of relief was paid out in tax reliefs across all creative industries, including film, TV and gaming, for the 2022/23 financial year, compared with £1.9bn in 2021/22. The growth was mainly driven by rises in the amount of High-end Television (HETV) tax relief and Theatre Tax Relief (TTR) paid. 

HM Revenue and Customs, which published the figures, suggests that changes to raise the rates of tax relief may have contributed to boosted numbers of claims across the board.

The government initially raised the rates of three corporation tax reliefs that are collectively referred to as the ‘cultural reliefs’ – Theatre Tax Relief, Orchestra Tax Relief, and Museums and Galleries Exhibition Tax Relief – in 2021.

It had been intended as a temporary measure to help the sector recover from the impact of Covid and had been due to taper down from 1 April 2023, before returning to previous levels from 1 April 2024.

But former Chancellor Jeremy Hunt announced at the Spring Budget in March that the rates will be permanently set at 40% (for non-touring productions) and 45% (for touring productions and all orchestra productions) from 1 April 2025.

The Labour Party saying it is committed to retaining the reliefs.

'Huge success story'

Before the election, Minister of State for Creative Industries, Arts and Tourism Chris Bryant said at a creative industries husting: “Of course, we're going to keep the tax reliefs. We invented the idea of tax relief right at the beginning.

“Of course, you've got to keep elements of them in under review so that they're as competitive around the world as is possible."

Will Simpson, Creative Sector Director at audit provider RSM UK, said: “These creative industry incentives continue to be a huge success story for the UK, and it’s been good to see the new government extoll the importance of the creative sector to the whole country.

"At a time when consumer spending has tightened, and budgets are being cut, it’s even more important to demonstrate stability to these reliefs to attract inward investment and support the sector.”