Corporation Tax Act 2009 (c. 4)

[F1 PART 15D U.K. Orchestra tax relief

Textual Amendments

F1 Pt. 15D inserted (with effect in accordance with Sch. 8 para. 17(1)(a) of the amending Act) by Finance Act 2016 (c. 24), Sch. 8 para. 1

Modifications etc. (not altering text)

C1 Pt. 15D modified (with application in accordance with s. 19(1)(4) of the amending Act) by Finance Act 2022 (c. 3), s. 19(1)(4)

CHAPTER 2 U.K. Taxation of activities of production company

Separate orchestral trade U.K.

1217Q Separate orchestral trade U.K.

(1) Subsection (2) applies to a company in relation to a concert if—

(a) the company qualifies for orchestra tax relief in relation to the production of the concert (see section 1217RA(2)), and

(b) the concert is not included in a concert series in relation to which the company has made an election under subsection (4).

(2) The company's activities in relation to the production of the concert are treated as a trade separate from any other activities of the company (including activities in relation to the production of any other concert).

(3) Subsections (4) and (5) apply to a company in relation to concerts in a series if the conditions in section 1217RA(4)(a), (b), (c) and (d) are met in relation to the company and the concert series.

(4) The company may, for the purposes of this Part, make an election in relation to the concert series.

See section 1217QA for provision about making an election.

(5) Where the company makes an election in relation to a concert series (and accordingly qualifies for orchestra tax relief in relation to the production of the series), the company's activities in relation to the production of the concert series are treated as a trade separate from any other activities of the company (including activities in relation to the production of any other concert).

(6) In this Part the separate trade mentioned in subsection (2) or (5) is called the “separate orchestral trade”.

(7) If the separate orchestral trade relates to a single concert, the company is treated as beginning to carry on that trade—

(a) at the beginning of the pre-performance stage of the concert, or

(b) if earlier, at the time of the first receipt by the company of any income from the production of the concert.

1217QA Election for concert series U.K.

(1) An election under section 1217Q(4) must be made by the company by notice in writing to an officer of Her Majesty's Revenue and Customs[F2 —

(a) before the date on which the company first delivers a company tax return for a period in relation to which a concert in the series falls to be treated in accordance with section 1217Q, or

(b) if later,] before the date of the first concert in the series.

(2) An election has effect in relation to the orchestral concerts specified in it, and must also specify which of those concerts (if any) are not to be qualifying orchestral concerts (see section 1217RA(3)).

(3) An election—

(a) may have effect in relation to concerts in two or more accounting periods, and

(b) is irrevocable.

(4) If the separate orchestral trade relates to a concert series, the company is treated as beginning to carry on that trade—

(a) at the beginning of the pre-performance stage of the first concert in the series, or

(b) if earlier, at the time of the first receipt by the company of any income from the production of the concert series.

Textual Amendments

F2 S. 1217QA(1)(a)(b) inserted (with effect in accordance with Sch. 4 para. 2(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 4 para. 2(1)

Profits and losses of separate orchestral trade U.K.

1217QB Calculation of profits or losses of separate orchestral trade U.K.

(1) This section applies for the purpose of calculating the profits or losses of the separate orchestral trade.

(2) For the first period of account during which the separate orchestral trade is carried on, the following are brought into account—

(a) as a debit, the costs of the production of the concert or concert series incurred to date;

(b) as a credit, the proportion of the estimated total income from that production treated as earned at the end of that period.

(3) For subsequent periods of account the following are brought into account—

(a) as a debit, the difference between the amount (“C”) of the costs of the production of the concert or concert series incurred to date and the amount corresponding to C for the previous period, and

(b) as a credit, the difference between the proportion (“PI”) of the estimated total income from that production treated as earned at the end of that period and the amount corresponding to PI for the previous period.

(4) The proportion of the estimated total income treated as earned at the end of a period of account is—

where—

C is the total to date of costs incurred;

T is the estimated total cost of the production of the concert or concert series;

I is the estimated total income from the production of the concert or concert series.

1217QC Income from the production U.K.

(1) References in this Chapter to income from a production of a concert or concert series are to any receipts by the company in connection with the production or exploitation of the concert or concert series.

(2) This includes—

(a) receipts from the sale of tickets or of rights in the concert or concert series;

(b) royalties or other payments for use of the concert or concert series;

(c) payments for rights to produce merchandise;

(d) receipts by the company by way of a profit share agreement.

(3) Receipts that (apart from this subsection) would be regarded as being of a capital nature are treated as being of a revenue nature.

1217QD Costs of the production U.K.

(1) References in this Chapter to the costs of a production of a concert or concert series are to expenditure incurred by the company on—

(a) activities involved in developing and putting on the concert or concert series, or

(b) activities with a view to exploiting the concert or concert series.

(2) This is subject to any provision of the Corporation Tax Acts prohibiting the making of a deduction, or restricting the extent to which a deduction is allowed, in calculating the profits of a trade.

(3) Expenditure which, apart from this subsection, would be regarded as being of a capital nature only because it is incurred on the creation of an asset (the concert or concert series) is treated as being of a revenue nature. [F3 (As to other capital expenditure, see section 53 and subsection (2).)]

Textual Amendments

F3 Words in s. 1217QD(3) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 4 para. 4

1217QE When costs are taken to be incurred U.K.

(1) For the purposes of this Chapter, the costs that have been incurred on a production of a concert or concert series at a given time do not include any amount that has not been paid unless it is the subject of an unconditional obligation to pay.

(2) Where an obligation to pay an amount is linked to income being earned from the production of the concert or concert series, the obligation is not treated as having become unconditional unless an appropriate amount of income is or has been brought into account under section 1217QB.

1217QF Pre-trading expenditure U.K.

(1) This section applies if, before the company begins to carry on the separate orchestral trade, it incurs expenditure on activities falling within section 1217QD(1)(a).

(2) The expenditure may be treated as expenditure of the separate orchestral trade and as if incurred immediately after the company begins to carry on that trade.

(3) If expenditure so treated has previously been taken into account for other tax purposes, the company must amend any relevant company tax return accordingly.

(4) Any amendment or assessment necessary to give effect to subsection (3) may be made despite any limitation on the time within which an amendment or assessment may normally be made.

1217QG Estimates U.K.

Estimates for the purposes of section 1217QB must be made as at the balance sheet date for each period of account, on a just and reasonable basis taking into consideration all relevant circumstances.]