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Exhibition Tax Relief - a lasting commitment to the arts

Posted on 12 March 2024

The Spring Budget provided further details on the £100 million 'Levelling Up' fund for cultural projects announced in November 2023, revealing that £52.6 million has been earmarked for six "nationally significant cultural investments." Notably, £10 million has been allocated to National Museums Liverpool, and £2.6 million to V&A Dundee.

It was also announced that the Museums & Galleries Exhibition Tax Relief (MGETR) would be made permanent, effectively removing the sunset clause on the relief. The extension of this valuable relief will be welcomed by the directors and trustees of museums and galleries as they look to source additional funds.

Understanding the relief

The MGETR is a tax relief afforded to certain companies that present an exhibition. MGETR will now permanently provide for a 45% tax relief on touring exhibitions and 40% for non-touring exhibitions. The relief allows eligible institutions to claim a corporation tax deduction, or a payable tax credit based on their qualifying expenditure.

A charitable company (or a company wholly owned by a charity or local authority) will be a qualifying company and museums and galleries will generally satisfy this test. To be classified as a primary production company, significant contributions in creative, technical, or artistic capacities are essential. This encompasses active involvement in various stages such as planning, decision-making, negotiations, contracts, and the management or production of the exhibition. Secondary production companies are generally responsible for the production and operation of the exhibition at the venue.

The exhibition itself must be a public display featuring an organised collection of objects or works that hold scientific, historical, artistic, or cultural significance. A minimum of 25% of the expenditure on producing and dismantling the exhibition (referred to as 'core costs') must be allocated to goods or services sourced from within the UK or the European Economic Area.

Certainty for cultural institutions

Objectively, the announcement in the Spring Budget is a step in the right direction for the safeguarding of the UK's cultural institutions. It is a promising sign of support from the Government and the permanent extension of MGETR will ultimately benefit museums and galleries across the UK.

Please do reach out to the Art Law and Tax & Wealth Planning teams at Mishcon de Reya for further advice on MGETR, including its practical implications and how to make the most of this valuable relief.

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