The government is consulting on the introduction of a new tax relief for orchestra production companies: it is proposed that this will be similar to Theatre Tax Relief.

Companies must be engaged in the production of live orchestral performances and the relief will be in respect of the creative and production costs incurred in their production. A higher rate of tax credit will apply to touring performances. It will be possible for orchestras to group together multiple qualifying performances in one tax relief claim

Qualifying companies can claim either:

• An additional tax deduction (the enhancement) of 100% of expenditure (the lesser of UK qualifying expenditure or 80% of total qualifying expenditure), or
• where after claiming enhanced deduction of expenditure the company makes a loss it may surrender the lower of that loss or the qualifying enhanced expenditure and be repaid a tax credit claim amounting to 25% of the loss for a touring production, or 20% of the loss for non-touring production

The maximum relief available per company is £50 million, and the maximum aid intensity should not exceed 100% of eligible costs.

To qualify, the majority of performances for which relief is being claimed must be played by a musical ensemble consisting of 14 or more performers and must include players drawn from each of the following four sections: string instruments, woodwind instruments, brass instruments and percussion instruments.

Where a company claims orchestra tax relief, it will not be able to claim relief under another tax credit scheme such as film tax relief, theatre tax relief or the research and development tax credit.

The company must be within the charge to UK tax and directly involved in the development of an orchestra’s performance, as in responsible for creating and developing the content of the performance and actively involved in the decision making process to deliver it.
Qualifying expenditure can be incurred in any country, although at least 25% of the core expenditure must be incurred in the European Economic Area.

All this may sound high level but these reliefs encourage more work for the individual musicians who comprise the orchestra.

Consultation on the proposed relief closes on 5 March 2015

Currently agencies are required, on a quarterly basis, to provide details to HM Revenue & Customs about themselves and any workers they have been involved in the supply of to end-clients, where the workers have been treated as self- employed for income tax and NI purposes and paid outside of PAYE.

According to HMRC’s revised reporting requirements, agencies (as ‘intermediaries’) will, in the same quarterly record on workers they provide to the end-user, also report the details of those who operate via an external PAYE umbrella company. The net payments to workers won’t have to be disclosed to HMRC by the agency (as that information is provided by the umbrella company via their RTI submissions) but the agency will have to report the amount paid gross to the umbrella company, including expenses and VAT. This means that HMRC will have access to both gross and net payments which will enable them to determine whether or not PAYE has been correctly applied; it will also provide a comprehensive record of which recruitment agencies are working with which umbrella companies.

HMRC has published its draft Finance Bill legislation on the proposal for payments of annuities to beneficiaries to be made tax-free on the death of an individual under 75, subject to certain conditions.  The draft clauses change the current provisions regarding who can receive payments from an annuity on the death of a member.  The changes permit anyone, including non-dependents, to receive these payments.  The facility for a beneficiary to take a tax-free annuity following the death of the member is going to be especially useful where the member had not taken out an annuity himself before death.