• Date

    31 May 2022
  • Category

Updates to Museum and Galleries Exhibition Tax Relief

The draft legislation has been issued and is going through the Parliamentary authorisation procedures. Set out below are some key proposed changes (which except where noted will be relevant for exhibitions where the production phase begins after 1 April 2022):

Current

Proposed update

Life of the relief

MGETR was due to be withdrawn from 31 April 2022.

Extension

MGETR has been extended for two years to 31 March 2024.

Rates of relief

The previous effective rate of relief for non-touring productions is 16% (80% x 20%).

The previous effective rate of relief for touring productions is 20% (80% x 25%).

Temporary rates of relief

For exhibitions where the production phase begins on or after 27 October 2021, the following effect rates will be applicable:

Dates

Non touring

Touring

27/10/21– 31/3/23

36%

40%

1/4/23 – 31/3/24

24%

28%



Definition of exhibition

“Exhibition” means a curated public display of an organised collection of objects or works (or of a single object or work) considered to be of scientific, historic, artistic, or cultural interest.

A display is not an exhibition if:

  • It is organised in connection with a competition of any kind,
  • Its main purpose, or one of its main purposes, is to sell anything displayed or to advertise or promote any goods or services,
  • It includes a live performance by any person,
  • Anything displayed is for sale, or
  • Anything displayed is alive.

A further exclusion

“A display of an object or work is not an exhibition to the extent that the public display of the object or work is subordinate to the use of the object or work (or of anything of which it forms part) for another purpose.”

In the explanatory notes to the draft bill, an example was give: if a historic passenger train offers rides between two towns, while the train may have historic or cultural significance, its main purpose is to provide passenger transport. This does not preclude the possibility of there being an exhibition on board the train.  

Definition of primary production company

A company is the primary production company if it meets conditions A and B.

A – the company:

  1. Makes an effective creative, technical, or artistic contribution to the exhibition, and
  2. Directly negotiates for, contracts for, and pays for rights, goods and services in relation to the exhibition.

B:

  1. Where the exhibition is held at just one venue, the company is responsible for the production of the exhibition at the that venue.
  2. Where the exhibition is held at two or more venues, the company is responsible for the production of the exhibition at (at least) the first of those venues.

A small change

In condition B (2) it will now substitute “(at least) the first” for “one or more”.

The primary production company does not need to be responsible at the first venue specifically. This makes it easier for a company to be the primary production company and for an exhibition to be classed as “touring”.

Companies qualifying for MGETR

Four conditions must be met for a company to qualify:

A: the company is either the primary or a secondary production company for the exhibition

B: the company is:

  • A charitable company which maintains a museum or gallery,
  • Wholly owned by a charity which maintains a museum or gallery, or
  • Wholly owned by a local authority which maintains a museum or gallery.

C: At the beginning of the planning stage, the company intends that the exhibition should be public.

D: The European expenditure condition is met.

Further definition

For the purposes of condition B… “the fact that a person is responsible for an exhibition at a venue does not, by itself, mean that the person maintains a museum or gallery.”

The explanatory notes to the draft bill states that this “clarifies that for a person to be considered to maintain a museum or gallery, it is not sufficient to be responsible for an exhibition at a venue. It would be expected for the person to have a connection to a site outside of the exhibition itself.”


Would you like to know more?

If you have any queries regarding what we cover in our guide, please get in touch with your usual contact or email charities@azets.co.uk.

About the author

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Simon Brown

Partner Newcastle
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