{"id":1148,"date":"2014-03-20T20:22:19","date_gmt":"2014-03-21T03:22:19","guid":{"rendered":"http:\/\/www.artsjournal.com\/worth\/?p=1148"},"modified":"2014-03-21T05:53:39","modified_gmt":"2014-03-21T12:53:39","slug":"tax-relief-for-british-theatre","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2014\/03\/tax-relief-for-british-theatre\/","title":{"rendered":"Tax relief for British theatre (updated)"},"content":{"rendered":"

\"how<\/a>The budget just announced by the British government provides for significant tax relief for live performing arts. Here are reports from The Stage<\/em><\/a>, The Telegraph<\/em><\/a>, and The Independent<\/em><\/a>. The Stage<\/em> gives details as follows:<\/p>\n

The scheme will mean producers are able to claim up to a 25% tax rebate on 80% of a production\u2019s up-front eligible budget costs ahead of its run.<\/p>\n

Touring shows will receive a 25% relief, while other productions will be eligible for a 20% tax credit.<\/p>\n

It will benefit both commercial and subsidised producers, because the relief will be claimed either by offsetting it against corporation tax \u2013 a levy on the taxable profits of an organisation \u2013 or as a cash credit.<\/p>\n

The relief will be applied on a per-production basis to 80% of a show\u2019s eligible capital expenditure \u2013 which includes all costs required to mount a show, apart from investment required for areas such as marketing, advertising and contingency funds.<\/p><\/blockquote>\n

A few thoughts.<\/p>\n

First, this is akin to the film and television production tax credits North Americans are familiar with; the tax relief is not contingent upon a jury deciding upon the quality of the production. It is not like grant money from an arts council, which can set criteria for awards.<\/p>\n

Second, let’s think about tax relief as a policy instrument. What goal is it meant to achieve? We can think of many things we want public subsidy of the arts to generate as outcomes: perhaps larger audiences, perhaps more productions, perhaps more artistic excellence. But what is the goal of *this* policy? There are many possible outcomes. More profits for investors in the sector? Greater financial rewards for the artistic talent?<\/p>\n

What worries me about a policy like this is its lack of focus. For a government that seems to be more concerned than most about performance metrics, this tax relief policy is quite vague on the hoped-for outcomes. Film tax credits are noted for increasing the returns to producers without generating the outcome that more people view films, or that films get better in quality (and nobody even pretends that these outcomes are the rationale for the policy).<\/p>\n

So, I’m not saying the tax relief is *necessarily* a poorly targeted subsidy. But it would be interesting to know how it translates into the usual goals of public arts policy.<\/p>\n

UPDATE: This morning (March 21) Artsjournal.com<\/a> links to a story from The Guardian<\/em><\/a>, giving it the title “Here’s Why to Fund UK Theatre: Plays Are a Major Export”.<\/p>\n

No. The Guardian<\/em> article is about the success of British theatre internationally. I don’t doubt that success, and that British plays, like many American movies, have international earnings as a necessary condition for profitability. But that does not<\/em> constitute a reason for subsidy. Simply because some good or service represents a net export is no cause to award it preferential tax treatment (and, as a result, give other industries less preferential<\/em> tax treatment).<\/p>\n

There are all kinds of reasons we might want the public sector to give preferential tax treatment, or direct subsidies, to the arts. We might think there are benefits to society that extend beyond those who attend plays, or we might think a more fair society will ensure those on lower income can attend the arts, or we might think there are spillover benefits to encouraging innovation and excellence in the arts, and there are other reasons as well. But the fact that a country exports a particular genre of art is not one of them.<\/p>\n","protected":false},"excerpt":{"rendered":"

The budget just announced by the British government provides for significant tax relief for live performing arts. Here are reports from The Stage, The Telegraph, and The Independent. The Stage gives details as follows: The scheme will mean producers are able to claim up to a 25% tax rebate on 80% of a production\u2019s up-front […]<\/p>\n","protected":false},"author":3,"featured_media":1149,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[26],"tags":[],"class_list":{"0":"post-1148","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-issues","8":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/03\/Blithe-Spirit-at-the-Schu-002.jpg","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-iw","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1310,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/05\/why-tax-breaks-for-commercial-theatre\/","url_meta":{"origin":1148,"position":0},"title":"Why tax breaks for commercial theatre?","author":"Michael Rushton","date":"May 23, 2014","format":false,"excerpt":"The Stage reports (and I repost the story in full here): Tax breaks for the theatre industry to be introduced this autumn could bring in \u00a3100 million for commercial theatre and \u00a320 million for touring productions in coming years, Arts Council England\u2019s chair PeterBazalgette has said. He said the initiative\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"coherent arts policy","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/05\/Pound-Sterling-Progress.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":646,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/04\/limiting-the-charitable-deduction\/","url_meta":{"origin":1148,"position":1},"title":"Limiting the charitable deduction","author":"Michael Rushton","date":"April 11, 2013","format":false,"excerpt":"As my blog-neighbor Lee Rosenbaum reports, the proposed 2014 budget from the White House would cap the tax benefit for charitable donations at 28%. In the U.S., where donations are deducted from the income tax base, the actual rate at which your donation is subsidized is your marginal tax rate,\u2026","rel":"","context":"With 1 comment","block_context":{"text":"With 1 comment","link":"https:\/\/www.artsjournal.com\/worth\/2013\/04\/limiting-the-charitable-deduction\/#comments"},"img":{"alt_text":"marginal rates","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/04\/1040of1913-219x300.gif?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1170,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/03\/taxing-music-downloads\/","url_meta":{"origin":1148,"position":2},"title":"Taxing Music Downloads","author":"Michael Rushton","date":"March 24, 2014","format":false,"excerpt":"Europeans have been able to avoid high home-country tax rates on downloads of songs and books by purchasing through Luxembourg. The UK wants to put a stop to that. The Guardian reports: George Osborne's latest\u00a0budget\u00a0could spell an end to 99p song\u00a0downloads\u00a0by closing a tax loophole that meant consumers were paying\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"get your downloads here","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/03\/Luxembourg.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":1067,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/02\/today-in-film-tax-credits\/","url_meta":{"origin":1148,"position":3},"title":"Today in film tax credits (Updated December 2, 2014)","author":"Michael Rushton","date":"February 21, 2014","format":false,"excerpt":"It never ends: production companies asking for, and getting, tax credits for local production when the economic case is cloudy, to say the least. 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