HM Treasury published a consultation document on a proposed new tax relief for museums and galleries from April 2017 for the qualifying costs of temporary and touring exhibitions.
The aim of the tax relief will be to encourage the creation of more and higher quality exhibitions. Tax relief will be available for the preparatory work and set up costs in relation to the exhibition but will not be available for the actual running costs during the exhibition.
The tax relief will not be available to museums and galleries run on a “for profit” or commercial basis. The tax relief will only be available for museums and galleries with charitable or educational objectives (which would include museums or galleries owned by local authorities). However, the museum and galleries must be within the scope of corporation tax so if the organisation was a charity the exhibition would have to be run by a trading subsidiary of the charity or local authority.
The tax relief will either be given as a further corporation tax deduction or by a tax credit that can be surrendered to HM Revenue & Customs in return for a cash payment. The consultation document asks for comments from interested parties in order to make sure that the tax relief is appropriate to the sector while ensuring that it cannot be open to abuse.
The consultation document is available here. Responses to the consultation must be submitted by 28th October 2016.
Further information and legal support
If you would like more information about this development or would like to discuss your options in more detail, please do not hesitate to contact any member of the Tax Team.
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