HMRC has published update guidance on claiming Museums and Galleries Exhibition Tax Relief for Corporation Tax. More detailed guidance for museums and galleries, including examples of how the relief is calculated, can be found in the Museums and Galleries Exhibition Tax Relief Manual.

Additionally, Laetitia Ransley, Associate at Farrer & Co, provided a related commentary.

The updated guidance from HMRC is reproduced below.

Who can claim

Museums and Galleries Exhibition Tax Relief is available to qualifying primary and secondary production companies that put on a qualifying exhibition.

Qualifying companies

A qualifying company needs to be one of the following:

• a charitable company which maintains a museum or gallery
• wholly owned by a:
  • charity which maintains a museum or gallery
  • local authority which maintains a museum or gallery.

A primary company must:

• make an effective creative, technical or artistic contribution
• be actively engaged in planning and decision-making
• directly negotiate, contract and pay for rights, goods and services
• be responsible for producing and running the exhibition at a venue.

If the exhibition is held at more than one venue, the primary company must be responsible for at least the first of those venues.

There can only be one primary production company for an exhibition.

If the exhibition is held at two or more venues, there may be secondary production companies.

A secondary production company must be:

• responsible for producing and running the exhibition at a venue
• actively engaged in decision-making in relation to that venue.

There may be more than one secondary production company in relation to an exhibition.

Qualifying exhibition

A qualifying exhibition:

• is a curated public display of an organised collection of objects or works considered to be of scientific, historic, artistic or cultural interest
• can be a single object
• has at least 25% of core expenditure spent on goods or services that are provided from within the European Economic Area (EEA).

Core expenditure is spent on:

• producing the exhibition
• uninstalling and closing the exhibition if it’s open for one year or less.

Who cannot claim

You cannot claim Museums and Galleries Exhibition Tax Relief for exhibitions:

• which are organised in connection with a competition
• where the purpose, or one of the main purposes, is the sale of displayed objects or works
• which include a live performance by any person, except where this is incidental or an incidental part
• where anything displayed is:
  • for sale
  • alive.

What you can claim

You can claim an additional deduction to reduce your profits or to increase a loss. This will reduce the amount of any Corporation Tax you will need to pay. If you make a loss, some or all of this loss can be surrendered for a payable tax credit.

Losses are usually surrendered at a rate of 20%, but there is a higher rate of 25% available for touring exhibitions.

The additional deduction will be the lower of either:

• 80% of total core expenditure
• the amount of core expenditure on goods or services that are provided from the EEA.

Touring exhibitions

A touring exhibition must meet these additional requirements:

• the exhibition must be held at more than one venue
• at least 25% of the objects or works displayed at the first venue must be displayed at every subsequent venue
• there should be no more than 6 months between uninstalling at one venue and installation at the next venue
• there must be a primary production company for the exhibition, which is within the charge to Corporation Tax
• the primary production company must intend from the planning stage that the exhibition will be touring.

How and when to claim

You can claim for relief on your Company Tax Return. You will need to calculate the amount of:

• additional deduction due to your company
• any payable credit due.

You should also provide:

• statements of the amount of core expenditure, split by EEA and non-EEA expenditure
• a breakdown of expenditure by category.

You may make, amend or withdraw a claim to creative industry tax reliefs up to one year after the company’s filing date.

HMRC may agree to accept late claims in some circumstances.