Extension of the Museums and Galleries Exhibitions tax relief (MGETR) sunset clause
Published 15 March 2023
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This publication is available at https://www.gov.uk/government/publications/two-year-extension-to-museums-and-galleries-exhibition-tax-relief-sunset-clause/extension-of-the-museums-and-galleries-exhibitions-tax-relief-mgetr-sunset-clause
Who is likely to be affected
This affects incorporated museums, galleries and other qualifying heritage institutions that are directly involved in the production of new exhibitions and claim Museums and Galleries Exhibitions tax relief (MGETR). Qualifying organisations can include those run as charitable companies, their subsidiaries or those with trading subsidiaries that are run under the control of a local authority.
General description of the measure
MGETR, the tax relief available for qualifying companies in the museum and gallery sectors, is due to expire on 31 March 2024. The relief will be extended for two years until 31 March 2026.
Policy objective
MGETR legislation includes a sunset clause which means that the relief will expire on 31 March 2024 unless renewed.
The government has temporarily extended the higher rates available to the cultural creative tax reliefs, which include MGETR. The government has therefore decided to extend MGETR for a further two years until 31 March 2026 to enable museums and galleries to benefit from the extension of the highest rates of relief and continue the government’s support for charitable companies to put on high-quality museum and gallery exhibitions.
Background to the measure
At Budget 2016 the government announced its intention to introduce a new tax relief for temporary and touring exhibitions from April 2017. A consultation on the proposed design took place from 5 September to 28 October 2016.
MGETR was introduced in Finance Act 2017 with effect from 1 April 2017.
MGETR included a sunset clause which meant that the relief would expire in April 2022. The government extended the relief for two years in Finance Act 2022 until 31 March 2024 as the sector had been particularly affected by the COVID-19 pandemic.
Detailed proposal
Operative date
This measure will have effect on and after the date of Royal Assent of Spring Finance Bill 2023.
Current law
The current law is contained in Part 15E of the Corporation Tax Act 2009.
Proposed revisions
MGETR includes a sunset clause at section 1218ZCG(1)(c) of the Corporation Tax Act 2009, which means that the relief will expire on 31 March 2024 unless renewed. The relief will be extended for two years, so that it expires on 31 March 2026 (unless further extended).
Summary of impacts
Exchequer impact (£m)
| 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 |
|---|---|---|---|---|---|
| 0 | -10 | -90 | -140 | -90 | -20 |
These figures are set out in Table 4.1 of Spring Budget 2023 as a package of measures called ‘Cultural reliefs: extend higher rates of the theatre, orchestra and museums and galleries tax reliefs for two years and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Spring Budget 2023.
Economic impact
This measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
There is no impact on individuals as this measure only affects businesses. This measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
It is not expected that there will be adverse effects on any group sharing protected characteristics.
Impact on business including civil society organisations
This measure is expected to have a positive impact on the approximately 1500 museum businesses that are potentially within scope of this relief, by allowing them access to this tax relief for two additional years.
This measure is expected to have a negligible impact on business costs. One-off costs could include familiarisation with the change. Continuing costs could include increased record-keeping and accountancy requirements in order to continue to file tax returns and make claims. Companies can choose whether to claim the relief or not and so companies will only be impacted if they’ve decided that the tax credit offsets the administrative burden.
Customer experience is expected to remain broadly the same as this measure does not alter how businesses or civil society organisations interact with HMRC. This measure is only expected to impact civil society organisations to the extent that they are charities that host an exhibition and choose to claim tax relief.
Operational impact (£m) (HMRC or other)
HMRC operational impacts for this change are expected to be negligible.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
An external review of the MGETR was launched in 2020 and was published in March 2022.
This measure will be kept under review and HMRC will monitor this measure through the analysis of claims data and the publication of summary statistics.
Further advice
If you have any questions about this change, please contact Kerry Pope on Telephone: 03000 585740 or email: kerry.pope@hmrc.gov.uk, or Stephanie Martinez on Telephone: 03000 519492 or email: stephanie.martinez@hmrc.gov.uk.