If you are responsible for the finance and operations of a museum or gallery, you might be thinking about submitting a Museums & Galleries Exhibition Tax Relief claim, or you have already submitted a claim and are looking for some additional information for your next return. In this article, we have put together some frequently asked questions to help you submit your claim, or please contact firstname.lastname@example.org for more information.
Who can claim Museums & Galleries Exhibition Tax Relief?
Your organisation must be a charity, the trading subsidiary of a charity or a company that is owned by a local authority. The relief is also available for SCIOs (Scottish Charitable Incorporated Organisations) and charities limited by guarantee.
Your organisation does not need to have paid corporation tax in order to claim the relief.
What costs qualify for Museums & Galleries Exhibition Tax Relief?
There are four phases to setting up an exhibition:
► Phase 1 – Speculative development – before the decision to proceed with the exhibition is made
► Phase 2 – Production and installation (incurring set up costs)
► Phase 3 – Running phase – the exhibition is open to the public
► Phase 4 – Dismantle and close the exhibition (uninstallation costs are only eligible if the exhibition is open for 12 months or less)
Only costs incurred during Phase 2 and Phase 4 qualify for the relief. Indirect costs, such as marketing and legal costs do not qualify for the relief.
What costs don’t qualify for Museums & Galleries Exhibition Tax Relief?
Indirect costs, such as marketing and legal costs will not qualify for the relief.
What are the rates that can be claimed?
Relief will apply at rates of 20% for non-touring exhibitions and at 25% for touring exhibitions and the relief will be capped at an equivalent of £500,000 of qualifying expenditure per exhibition. The relief is based on 80% of eligible expenditure, meaning the maximum cash repayment will be £80,000 for non-touring exhibitions and £100,000 for touring exhibitions.
How do I get the money back?
The claim forms part of your charity’s corporation tax return and can be submitted as soon as your charity’s accounts have been signed off after the year-end. If your charity does not currently complete a corporation tax return, this can be done in order to make the claim. HMRC typically make repayments within 4 – 6 weeks after submission of the return.
What type of exhibitions are eligible?
It must be an “organised collection of objects, works and artefacts which are of scientific, historic, cultural or artistic interest”. At least 25% of the qualifying expenditure must be spent in the European Economic Area (EEA).
Can I claim for an exhibit which includes a live performance?
You can’t claim for an exhibition which includes a live performance by a person or an animal. Performances by people incidental to the exhibition, such as costume wearing guides will not stop the exhibit from qualifying, but their costs are not allowable.
Can I claim running costs from the day of opening?
Running costs from the day of opening will not be eligible for relief. For example, invigilation costs when the exhibition is up and running are not allowable.
How long do I have to submit a claim?
You have got two years from when your accounts have been signed off to make the claim. But the sooner you get the claim in, the sooner you will get your money back.
Can you claim for costs for an exhibit which is touring within your museum or gallery?
Yes, only for costs that you have incurred in set-up and de-installing, within certain timescales.
Is there a cap on claims?
For each exhibition, there is a cap of £500,000 of qualifying expenditure.
What type of touring exhibition would qualify?
In order to qualify as touring, the exhibition must be held at two or more geographically different venues. The time between dismantling at one venue and setting up at another venue should not exceed six months. In addition, at least 25% of the works displayed at the first venue must also be displayed at the following venues.
I don’t pay corporation tax – can I still claim?
Yes, as long as you are in the charge to corporation tax. Also, if you have never been asked to complete a return by HMRC you can still claim.
Does my exhibition have to be in a museum or gallery in order for it to qualify?
No, it could be in a library or a castle for example, as long as all the other conditions have been met.
We plan to sell the items on display as part of the exhibition, does this still qualify?
No, one of the conditions of the relief is that you can’t sell the items on display.
The exhibition has been organised in connection with a competition, will the exhibit still qualify?
No, exhibitions will not qualify if they have been organised in connection with a competition of any kind.
Can I claim for private view only exhibitions?
You can have private viewing as part of the exhibit, but the exhibition itself must be open to the general public. Private viewing costs will not apply.
Can I claim for an exhibition which includes live animals?
No, you can’t claim for an exhibition which includes anything displayed which is alive.
Can I claim for storage costs?
You can only claim for storage costs if there is more than one venue for the display, the storage is off-site and will not be stored for more than 4 months.
Do you have any other questions?
If you have any comments or questions, please contact Susan Pattison.
The information in this article is of a general nature and seeks to highlight some of the issues which could be affecting you and/or your business, including changes to financial regulation and legislation. Readers should not rely on this information without seeking professional advice on its application in their circumstances.