Museums and Galleries Exhibition Tax Relief – what is it?

This post was prepared in April 2017, prior to the June General Election being announced. Following the announcement the situation on this legislation changed and the bill was put on hold pending Governmental election. The bill has since passed into law (16 November 2017). Applications to the relief can be backdated to 1 April 2017.

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Some of you might have heard about the new proposed tax relief for museums and galleries, which was consulted on in Autumn last year and follows on from a range of other creative industries legislation – most recently the theatre tax relief introduced in 2014. We’ve drafted this blog to de-mystify the bill and pick out the most important and useful points to help you understand a little more about what has been proposed.

What is the tax relief?

Before we get into detail, we should reiterate that we are not tax experts. Finding out more about what this means has been a journey for us. Our introduction to this topic was through the consultation on the shape of the tax relief last year.  From the experience of the last six months, we think this is a great opportunity for all museums and galleries as it enables them to recoup expenses on exhibitions, but we recommend that you contact a tax accountant to talk about your specific situation.  From our position as the National Development body, we want to help to spread the word about the benefits and empower museums to apply.  So, we’ll start with some basic facts.

Who is it relevant for?

All museums with a public function who hold exhibitions!

When is it relevant? 

For any museum when developing exhibitions – touring, temporary or permanent.

So, what exactly is it?

This relief will support museums and galleries to develop new exhibitions for the public and allows them to reclaim some of the costs.  Getting down to some figures; the overall limit is £500k of core expenditure per exhibition.  It applies at rates of 20% for non-touring exhibitions and 25% for touring exhibitions

What does it cover?

The relief covers all costs involved in producing the exhibition, including curator fees, cost of deinstalling and closing.

What doesn’t it cover?

It doesn’t include indirect costs like marketing, raising of finance, legal services, advertising and security.  Some more detailed areas of exclusion are –

  • Running costs from day of opening
  • Invigilation costs
  • Storage if not in 6 month touring period

How do I apply?

This can be applied for in company tax return so some pointers are

  • You need to claim through a company
  • Can apply if don’t pay corporation tax
  • You may want to use a trading subsidiary

What other information is there on the relief?   

There are already some sources out there with more information.

HM Treasury produced a useful paper on responses to the consultation.  We found this paper helpful to understand the shape of the tax relief and why certain decisions had been made.  We could also pick out the voices of several MGS colleagues who submitted replies!

Arts Council England have produced a useful set of FAQs with links to the legislation

What next?

As cited above, we have to wait for announcements after a new government has been formed about the future of the tax relief.  Once the outcome is known, we will let you all know.

MGS want to raise awareness of the tax relief and are looking at opportunities to do this like training, developing resources and webinars. Some of you reading know about the tax relief and some might not. Either way we would welcome your feedback about how to get the message about and support museums.  Please send any thoughts or comments in as it will help shape our future work.

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