Spring Budget Overview

Theatre Tax Relief made permanent at 40% and 45%!

Last week, the government responded to SOLT & UK Theatre’s call to maintain the higher rates of theatre tax relief (TTR) by introducing a new permanent rate of 40% and 45% for touring productions. This announcement comes after a longstanding campaign to demonstrate the pivotal role that the higher rates of TTR have played in enabling UK theatre to grow and thrive. This good news is thanks in no small part to the contribution of SOLT & UK Theatre members who helped us to make the case for these permanent rates.

The introduction of a permanent rate of TTR is part of a broader package of tax reliefs for the cultural and creative industries including music, film and the visual arts, representing support worth £1 billion over the next five years.

Some of the press coverage on the new permanent TTR rates

Eligibility criteria for high net worth / sophisticated investors

There was more good news last week, as the Chancellor announced that the government will legislate to reinstate the previous eligibility criteria to qualify as a high net worth or sophisticated investor and will also carry out further work to review the scope of the exemptions. We’ve welcomed this decision to reverse the rule changes to private investment that affects the financing of new commercial productions.

We worked with members and the UK government to communicate how these changes would have significantly reduced the potential pool of individuals eligible to invest in new commercial theatre and would have had a hugely detrimental impact on new and emerging producers. The Treasury have confirmed that this welcome rule reversal will come into effect on 27 March. 

SOLT & UK Theatre will be publishing guidance and will be hosting a member webinar on this issue in April. Look out for further information on this shortly.

Infrastructure Funding

We also welcome the announcement that the UK government is investing £26.4 million in upgrading the National Theatre’s stages and infrastructure and £1.6 million for Theatr Clwyd in Wales, to support a major refurbishment.

Local Authority & Levelling Up Funding

The Chancellor also announced that £15 million in funding will be provided to the West Midlands Combined Authority for culture, heritage and investment projects and the UK government has agreed a deeper “trailblazer” devolution deal with the North East Mayoral Combined Authority. This is welcome in the context of cuts to local authority culture budgets happening in various parts of the country.

There was also a re-commitment of £100 million of Levelling Up funding for culture up to 2030.

Investment Zones

The government has also published further details for six Investment Zones (IZs) in Greater Manchester, Liverpool City Region, North East of England, South Yorkshire, West Midlands and Tees.

Read the Creative Industries Policy and Evidence Centre’s blog post on their assessment of what the latest budget means for the creative industries.

Other announcements that will affect some members

The main rate of Class 1 employee National Insurance contributions (NICs) will be cut from 10% to 8% from April 2024; the main rate of Class 4 employee NICs will be cut from 8% to 6% from April 2024. This is in addition to the 1% cut announced in the 2023 Autumn Statement, which also comes into effect in April 2024.

The VAT threshold will be increased from £85,000 to £90,000 in April 2024. The Government estimates that this will benefit 28,000 businesses. The deregistration threshold will be raised from £83,000 to £88,000.

The Recovery Loan Scheme is being renamed the Growth Guarantee Scheme and is being extended to March 2026. It was due to run until 30 June 2024. It is a government-backed loan scheme designed to support access to finance for UK businesses. It replaced earlier schemes to support businesses affected by the Covid-19 pandemic.