Contributed by Larking Gowen
3/01/2023 - Larking Gowen
Thursford Enterprises has won a test case in a dispute with HMRC over whether its Christmas Spectacular was entitled to Theatre Tax Relief (TTR).
The Norfolk show is the largest of its kind in Europe and draws thousands of visitors to the region every year.
Larking Gowen’s Corporate Tax Specialist Ben Greves was advising Thursford Enterprises and assisting with the dispute. “For a number of years Thursford has made a claim under the Theatre Tax Relief scheme for the costs of producing the Christmas Spectacular.
“This is something we had advised them to do after informal discussions with HMRC. However, in 2019 HMRC told them it was launching an enquiry into the company’s TTR claim, which was the start of a long drawn-out and challenging process,” he explained.
He said Thursford’s position has been greatly helped by Larking Gowen’s advice to establish robust documentation and a filing position that could be supported. Also, that Thursford had subscribed to the firm’s Tax Enquiry Protection Service (TEPS) which protected them from substantial professional costs in defending their position.
When the two parties were unable to reach a negotiated position, HMRC issued a closure notice concluding that the Christmas Spectacular was not a qualifying production for TTR.
Thursford appealed against the closure notice and took their case to the First Tier Tribunal, where the judge ruled that the show was in fact a qualifying production for TTR. HMRC decided not to appeal the decision.
“Before we even open our doors for the first performance, our production costs are in the region of £2m. Without Theatre Tax Relief, we would not be able to sustain our production, which has a cast of over 130 singers, dancers and musicians, not taking into consideration the technical and production teams.
“Everything in the show is performed live, and that is why over 100,000 audience members travel each season from every county in the country, as well as, increasingly, from further afield to see our Christmas Spectacular. TTR was passed as a Government Bill to protect and promote live theatre within the United Kingdom; to encourage and support us as a centre of excellence in the arts.”
He said that having a TEPS subscription in place had made the decision to go ahead with the financial burden of the appeal more defensible to the organisation’s trustees.
“Larking Gowen were with us at every stage of the journey. Following the acceptance of the appeal by HMRC they appointed a Chartered Tax Advisor, Andrew Gotch from The Tax Fellowship, who was absolutely superb and whose expertise and advice certainly helped us win the case.”
John stated this year’s Christmas Spectacular was playing to full houses of 1,400 patrons twice a day, “with standing ovations from the very first show.”
“With the continued support of TTR, long may our Christmas Spectacular survive and flourish,” he commented.
Larking Gowen’s Ben Greves said: “Tax relief is a form of funding for the arts sector, and this was a test case which helped us, and HMRC, determine where the line is drawn.”
Find out more about Larking Gowen’s Tax Enquiry Protection Service here.
Photo © Thursford Enterprises
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