MGETR70030 - Museums and Galleries Exhibition Tax Relief: calculation: rate of relief
S1218ZCH and S1218ZCK Corporation Tax Act 2009
Where a Museums and Galleries Exhibition Production Company (MGEPC) claims Museums and Galleries Exhibition Tax Relief (MGETR) in respect of enhanceable expenditure, the amount of Museums and Galleries Exhibition Tax Credit (MGETC) to which it is entitled is:
- 20% of the loss surrendered for a non-touring exhibition, subject to a maximum of £80,000 per exhibition
- 25% of the loss surrendered for a touring exhibition, subject to a maximum of £100,000 per exhibition.
From 1 April 2025, the rates are raised to 40% and 45% respectively, still subject to the same maximum per exhibition. See MGETR10090.
The value of MGETR will depend on whether or not the separate exhibition trade is loss-making and the prevailing rate of Corporation Tax.
The examples below show the value of MGETR assuming in each case that:
- at least 80% of the total core expenditure is UK core expenditure
- the rates from 1 April 2025 apply
- the rate of Corporation Tax is 25%
Example 1
MGEPC with sufficient taxable profits to absorb all of the additional deduction
Enhanceable expenditure = 80% of total expenditure
Value of MGETR = 80% x 25%
= 20% (reduction in Corporation Tax payable)
Example 2
MGEPC has no taxable profits and claims the maximum amount of tax credit
Enhanceable expenditure = 80% of total expenditure
Value of MGETR
= 80% x 45%
= 36% (tax credit: touring exhibition)
Or
= 80% x 40%
= 32% (tax credit: non-touring exhibition)
This means that there will normally be both a timing benefit and an overall financial benefit to surrendering losses for a tax credit. However, this might not be the case where the special terminal losses rules apply.
The anti-avoidance provisions prevent a company from artificially inflating production costs in order to increase MGETR. These provisions will also apply to a situation where income is not recognised or is deferred in order increase the surrenderable loss.