Museums and Galleries Exhibitions Tax Relief extended

Richard Sagar, Head of Policy, Charity Finance Group, highlights key elements of the Spring Budget for museums.

Against a better-than-expected economic backdrop from the Office of Budget Responsibility the Chancellor referenced the “brilliant work” that third sector organisations are doing to “help people struggling in tough times.” Specific announcements for the museums and culture sector included:

Support for charities and community organisations – The government will provide over £100m of support for charities and community organisations in England… targeted towards those organisations most at risk, due to increased demand from vulnerable groups and higher delivery costs, as well as providing investment in energy efficiency measures to reduce future operating costs.

Charity Taxes – The government will restrict charitable tax reliefs to UK charities and CASCs only from April 2023 – protecting the Exchequer and focusing UK taxpayer money on UK charities. European Union (EU) and European Economic Area (EEA) charities that HMRC has previously accepted as qualifying for charity tax reliefs before 15 March 2023, will have a transitional period until April 2024.

Extending the higher rates of Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR) and Museums and Galleries Exhibitions Tax Relief (MGETR) for 2 years – The temporary higher headline rates of relief for TTR, OTR and MGETR will be extended so that from 1 April 2023, the headline rates of relief for the TTR and the MGETR will remain at 45% (for non-touring productions) and 50% (for touring productions). OTR rates will remain at 50%. From 1 April 2025, the rates will be 30% and 35%, and on 1 April 2026 the headline rates of relief for TTR and MGETR will return to 20% and 25%. The headline rates of relief for OTR will return to 25%.’

‘Extension of the MGETR sunset clause – MGETR will be extended for a further two years until 31 March 2026.’

Qualifying expenditure in theatre, orchestra and museums and galleries exhibitions tax reliefs – Qualifying expenditure for theatre, orchestra, and museums and galleries exhibition tax reliefs will be changed to ‘expenditure on goods and services that are used or consumed in the UK.’ This will align the cultural reliefs with the audio-visual reliefs and ensure these reliefs remain compliant with the UK’s international obligations. Productions that have not concluded by 1 April 2024 may continue to claim EEA expenditure until 31 March 2025.’

Rachelle Rowbottom of CFG’s corporate partners, BHP, commented:

“The museum and galleries tax relief previously had a sunset clause within the legislation meaning that it was available until 31 March 2024, thankfully this has been extended to 31 March 2026. It is important that qualifying organisations claim these reliefs as and when they are eligible, to demonstrate their importance to the sector. There will also be changes to the definition of qualifying expenditure which will be amended to ‘expenditure on goods and services that are used or consumed in the UK.”

AIM Chair, Andrew Lovett OBE said

“AIM very much welcomes the announcement in yesterday’s Budget that Museums and Galleries Tax Relief will continue for a further two years. It’s an expression of Treasury support for the sector and it can often make the difference between doing an exhibition or not.  It’s also a good result for cross-sector advocacy efforts, work that continues as we press for it to be made permanent. ”

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