Orchestra Tax relief overview: What it is, who can benefit and how we can help

Orchestra Tax Relief (OTR) is the latest in a line of state aid tax reliefs for the creative industries. OTR incentivises the production of orchestral concerts – and amateur orchestras are specifically referenced in the legislation.

We have extensively researched OTR and believe that it has the potential to be hugely beneficial to instrumental amateur music groups across the UK:

  • Although it is called Orchestra Tax relief it can apply to many types of instrumental group – so don’t be put off if you are not a traditional orchestra 
  • Although there are costs and admin time involved in claiming OTR, we think even for smaller groups these will be outweighed by the financial gains (see below for some sample figures)

Why is it so great?

Lots of reasons – we think two of the biggest are:

  • No cultural test:  OTR is not dependent on what is being performed, who the audiences are, how technically able the musicians are or how modern the composer. It is simply money to encourage putting on concerts.
  • It’s there every year – if you do concerts that qualify every year, you can claim every year

How do we find out more?

We have provided some detailed guidance, template documents and services to help guide your through OTR from start to finish. Briefly here are some of the key facts:

Who can claim?

If your group plays concerts featuring 12 or more instrumentalists who are the main focus of the concert, then you can potentially claim OTR.

How much money do we get?  We have analysed a number of member groups and estimated the annual overall OTR gains. These range from:

  • An overall gain of £487 for a group with annual concert production costs of £5,000
  • An overall gain of £3,637 for a group with annual concert production costs of £34,177.

How do we claim?

The claim process will involve a bit of work and some changes to how you operate – but we can provide lots of help along the way. You will need to read our detailed guidance (see below) to fully understand how it works, but at the most basic level it involves:

  • Your group setting up a limited company and sub-contracting concert production activities to that company
  • At the end of its financial year, the production company completes its accounts and makes the OTR claim to HMRC in the form of a tax return.

How can Making Music help?

We have broken our resources into three sections - containing guidance, templates, toolkits and services to help take guide you through from deciding if OTR is for you to actually making a claim.

OTR, Part 1: Helping you decide – free to members

OTR, Part 2: Setting up (the nuts and bolts)  free to members

Toolkit: setting up a production company

  • Guidance: Setting up a Production Company
  • Template: Memorandum & Articles of Association
  • Template: Declaration of Trust
  • Guidance: Completing form IN01

Toolkit: running a production company

  • Guidance: Running a Production Company
  • Template: Agreement between Parent Organisation & Production Company
  • Guidance: Notes to accompany the agreement
  • Guidance: Making an Election to HMRC
  • Sample: Timeline for an OTR year
  • Template: Transfer of Stock

OTR, Part 3: Keeping records, producing accounts and making a claim

  • Guidance and templates: we will be producing more guidance and templates later in 2017

Services:

1.    Support for producing statutory annual accounts for your production company. There will be fee for this service:

  • £125 + VAT for member groups below £31k income
  • £250 + VAT for member groups £31k-£100k income

2.    Company Tax return and OTR claim submission: submission of Company Tax return and OTR claim on your behalf. There will also be a fee for this service

  • £125 + VAT for member groups below £31k income
  • £250 + VAT for member groups £31k-£100k income

We hope you find this Making Music resource useful. If you have any comments or suggestions about the guidance please contact us. Whilst every effort is made to ensure that the content of this guidance is accurate and up to date, Making Music do not warrant, nor accept any liability or responsibility for the completeness or accuracy of the content, or for any loss which may arise from reliance on the information contained in it.