Orchestra relief strikes the wrong notes

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The UK tax system is a complex mess of reliefs and anti-avoidance rules because politicians insist on using the tax rules to achieve goals other than raise money. A classic example is the new tax relief for the production of orchestral concerts (Finance Bill 2016, s 27).

Tax reliefs can play an important role in a tax system; to ensure profits are taxed fairly, to exempt small amounts from tax, or to define where the tax burden should not fall. The personal allowance an example of this last type of relief, as it removes those on low incomes from the burden of paying income tax, and simultaneously ensures that the tax paid by those with incomes over £100,000 is much greater.

The new orchestra relief falls into the category of tax reliefs whose purpose is to achieve a social obj...

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Brilliant

I wonder how many claims have been made in relation to these 22 pages of tax legislation? 

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Brilliant

I wonder how many claims have been made in relation to these 22 pages of tax legislation? 

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Yes it's too much to hope!

I'm totally in favour of live music of any persuasion, but this seems to add unnecessarily to the tax code. Why create a loophole when you don't need to? - e.g. Films or, back in the day, woodlands.

No doubt some people will be assembling teams of a dozen people with comb and paper.

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Copy and Paste

Isn't this legislation more born out of the draftsmen copying and pasting from the film tax credit / video game tax credit systems rather than starting from scratch? The same thing happened when they used the EIS rules as the cornerstone for social investment tax relief, and ended up with various rules which made no sense in the context of a social investment company (alongside certain rules which did make sense). I do agree with the underlying point though. In the same vein, why are HMRC collecting student loan repayments and dealing with tax credits and child benefit payments and so on?

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Many orchestras are charities

... and so do not pay Corporation Tax.  However, it appears that they can still claim the tax credit, of 80% of costs in most cases, and surrender it for a 25% tax credit - which of course is now significantly more than the rate of Corporation Tax.  This should become a useful additional tax relief for many charities, perhaps one that will require some burning of the midnight oil.

It's a more arbitrary form of funding than that available from Arts Council England and similar bodies - and some will consider it all the better for that.

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British Culture

 

This words "British Culture" or "British Values" are creeping into everything  including schools, nurseries, TV news programs and now Government bills.

A friend, on holiday in Europe this year was told that the typical Brit (in their opinion) was a bald-headed, tattooed, benefits cheat who drinks German lager and eats Indian curries!

Are we now to see more Wagner in our orchestral performances or perhaps a Bollywood musical in the promotion of British Culture and British Values!

 

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The core definition seems a bit woolly

.. and this will require much burning of the midnight oil.

Claims are to be based on 80% of qualifying core expenditure:

"1217RC “Core expenditure”(1) In this Part “core expenditure”, in relation to the production of a concert or concert series, means expenditure on the activities involved in producing the concert or concert series.(2) The reference in subsection (1) to “expenditure on the activities involved in producing the concert or concert series” includes expenditure on travel to and from a venue other than the usual venue for concerts produced by the company.(3) But that reference does not include—(a) expenditure on any matters not directly involved with putting on the concert or concerts (for instance, financing, marketing, legal services or storage),(b) speculative expenditure on activities not involved with putting on the concert or concerts, and (c) expenditure on the actual performance or performances (for instance, payments to musicians for their performances in the concert or concert series)." 

So it excludes the cost of putting on the concert, or travel to it in most cases. Does it include musicians' costs for rehearsals?  Does it include some apportioned element of admin costs?  What is the relief really for?  Needless to say, the explanatory notes published with the Finance Bill do not address these central questions.  

It's definition by exclusion, and I think orchestras and their accountants are going to struggle with this, especially in the early stages.  

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Will New Orleans Boogiie Woogie
Not be claimable? Speak with Jon Cleary or Hugh Laurie. How does one define British Music? Do we stick with Elgar? Do we do a demo disc send to our local inspector and ask for a ruling? Can't these A***holes see that music is a global phenomenon! Only a cretin will attempt to localise it.

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