MGETR50040 - Museums and Galleries Exhibition Tax Relief: qualifying exhibitions: minimum expenditure condition
S1218ZCC Corporation Tax Act 2009
To be a qualifying exhibition for Museums and Galleries Exhibition Tax Relief MGETR) purposes at least 10% of the core expenditure (MGETR60010) on the exhibition incurred by the Museums and Galleries Exhibition Production Company (MGEPC) must be UK expenditure.
UK expenditure is expenditure on goods and services that are used or consumed in the United Kingdom. The origin of the provider of the goods or services does not matter - the test looks at the location of the recipient who uses the goods or services to determine whether expenditure is UK expenditure. For example, consideration paid to borrow an object from a gallery in France for use in an exhibition held in the UK would be UK expenditure, despite the fact that the provider is based overseas. Please see MGETR60060 for more details.
Pre-completion periods
Whether an exhibition meets the 10% UK expenditure condition cannot be determined until after the end of the completion period (the accounting period in which the company ceases to carry on the separate exhibition trade in respect of the display).
But tax returns for any earlier periods (pre-completion periods) can include claims to MGETR based on an expectation that the condition will be met if they include a statement of planned core expenditure that is UK expenditure and this indicates that on completion of the exhibition the UK expenditure condition will be met.
Claims for pre-completion periods will be revisited and MGETR claims revised if it turns out the final amount of core expenditure that is UK expenditure is less than 10% but claims have been made as if the condition would be met.
Final statement of the core expenditure on the exhibition that is UK expenditure
The tax return for the final accounting period must:
- indicate that the exhibition has been completed or abandoned, and
- include a final statement of the core expenditure on the exhibition that is UK expenditure.
The final statement should include all core expenditure on the production by the MGEPC. It should take account, as far as it is possible to estimate such amounts with reasonable certainty, of the amount of any deferred payments of UK core expenditure that can be expected to be paid out in the future.
Previous European expenditure condition
For accounting periods ending before 1 April 2024, the requirement was for at least 25% of the core expenditure to be European expenditure. European expenditure is that which is expended on goods and services originating within the UK or EEA. For example, an exhibition may be borrowing an object from a gallery in Italy and arrange for a specialist Italian company to transport it to the UK. That would be European expenditure. However, if the object was borrowed from the US and a US company was used, that would not be European expenditure.
The same rules about pre-completion periods and the final statement of core expenditure apply, but using European expenditure in place of UK expenditure and a minimum of 25% instead of 10%.
Please see MGETR50045 for guidance about how to apply the rules when both the UK expenditure condition and European expenditure condition apply to a single exhibition.