Museums and Galleries Exhibitions Tax Relief (MGTR) was introduced by the Finance Act 2017 to support the museums and galleries sector and came into force on the 1st April 2017. It is available to charitable companies, wholly owned subsidiaries of charities, or companies wholly owned by local authorities.
The company receives an additional deduction based on the costs of creating each new exhibition or display. Where the additional deduction creates a loss, then the loss can be surrendered for a payable tax credit. The tax credit is paid at the rate of 25% for those exhibitions that meet the definition of a touring production and 20% for those that don’t.
As well as the above, the company must be recognised as a charity by HMRC and be able to submit a Corporation Tax Return if requested. Charitable companies are commonly exempt from Corporation Tax and there is no requirement for a company to have paid Corporation Tax before they claim the tax credit.
MGTR, although based on the legislation that applies to Theatre Tax Relief and Orchestra Tax Relief, has some noticeable differences:
- The introduction of Primary and Secondary Production Companies
- The capping of claims to £80,000 per exhibition for non-touring exhibitions and £100,000 per exhibition for touring exhibitions
- Qualifying expenditure must be incurred on or before 31 March 2022
MGTR is potentially a great source of funding to museums and galleries that are developing new exhibitions and display collections.
For more information contact Amanda Hall, Counterculture’s creative tax expert who can provide more details and advise you on all aspects of the above. Contact Amanda at email@example.com.