Orchestra Tax Relief: The Expense of Excellence

By Amanda Rigali on

Chrstina McNeill Profile 2

Christina McNeill was Arts Fundraising Fellow for the Hallé until September 2016, and has remained at the organisation as Development Campaigns Officer.

A key factor which I think all the Arts Fundraising Fellows have been learning over the past seven months is that in the funding game, every little helps. Therefore, I’ve observed how important it is to keep abreast of current affairs both social and political, so that arts organisations can always make the most of any new trends or opportunities as they arise.

Now, at the start of a new tax year, those of us fundraising in orchestral institutions have special reason to sit up and pay attention to our Finance Departments when they talk ‘tax’ as new Government plans come in to effect. Since 2007 the film industry has benefitted from claiming tax back on productions and in September 2014 theatre productions also had its own legislation introduced for performances. Now, as of 1st April 2016, orchestral organisations will join the fold and benefit from their very own tax relief legislation based on these earlier models.

The motivation behind the Orchestra Tax Relief legislation being introduced by the Government is to encourage artists and ensembles to stage more performances and bigger performances by essentially reducing the overall costs of such productions. Instrumental ensembles will now be able to claim back around 20% of core expenditure costs that are acquired for concert productions and performances, for example, copyright costs, venue and music hire.

Such legislation has already been proven to be successful for arts organisations. It was recently reported that after the first full financial year of the Theatre tax relief scheme, theatre productions have successfully claimed back £25 million from productions and many are predicting that year two claims will be even higher. Also, with a view to the longer term success, it has been reported that since the film industry legislation was introduced in 2007, £1.3 billion had been claimed (as of January 2015) and subsequently supported the production of over 1,200 films.

The only concerns over such tax benefits is whether having the opportunity to claim back such sums will subsequently be reflected by a reduction in Arts Council or Government funding in the future. However, when the Theatre tax relief was being brought in Ed Vaizey, Minister of State at the Department of Culture, Media and Sport assured organisations that the legislation was ‘not a substitute for core public funding which [the government] will continue to maintain.’

OrchestraShould these words also be true and remain so with regards to the new legislation it will come as music to the ears of orchestral and instrumental organisations whose funding futures remain uncertain, in light of announcements by councils of major cuts to the arts. In the case of my host, whose Arts Council funding has been at a standstill since the crash in 2008 (even with inflation) and announced cuts of 10% from the City Council – any additional support could go some way to start bridging the gap that’s beginning to form.

It is certainly encouraging to see just how successful the tax benefits have been for both theatre and film industries so far and hopefully it will be the same for the orchestras and qualifying ensembles that get involved. It’s good to know that the government are becoming more and more aware of the needs of arts organisations and appear to be trying in some way to ease some of the costs, therefore encouraging artists to create more than usual and also feel the freedom to go bigger.

Does this new legislation affect you? How much could your organisation save? Have you benefitted already from the theatre or film tax relief? We’d love to hear from you!

Posted by Amanda Rigali

Amanda is Director of Strategic Development at Cause4, and Head of the Arts Fundraising & Philanthropy Programme. As well as running the Programme, Amanda runs fundraising training sessions for cultural professionals across England and offers intensive strategy support to a range of charities.

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