MGETR60020 - Museums and Galleries Exhibition Tax Relief: eligible expenditure: meaning of 'phases of exhibition'
Development
Development is the stage of creation of a production in which the project progresses from the initial concept to the point at which a decision can be taken as to whether or not it should proceed to production.
During development all the necessary elements are assembled to enable a producer to make a judgement on whether or not the production is a viable project.
Expenditure on development activities is not core expenditure and will not qualify for Museums and Galleries Exhibition Tax Relief (MGETR) if the production does not get ‘green lit’, that is if there is not a firm and definite commitment that the production will go ahead as evidenced, for instance, by ticket sales, hire of exhibition venues, acquiring exhibit items etc. The intention is to separate speculative expenditure on productions which never go ahead from purposive expenditure undertaken in the knowledge that a decision has been taken to proceed with the production.
However, if the production does get ‘green lit’, some expenditure on development may be reclassified as expenditure on producing the production if it directly relates to activities in the later production phase. Such expenditure can be apportioned where necessary, provided the apportionment is just and reasonable.
Production
The production phase begins when the project has been ‘green lit’–this is when there is a definite commitment to going ahead with the production. Any expenditure incurred prior to this would be part of the development phase.
The production phase involves all the activities necessary to turn the developed idea for a production into an actual exhibition that is ready to be displayed to the public. Such activities may include, but are not limited to: production team meetings, acquiring items for exhibit, venue preparation. The production phase is broadly defined for the tax reliefs and includes activities often referred to as pre-production.
There is some blurring between development and production. While a venue might be booked far in advance, this does not necessarily signify that the production phase has started if nothing else has happened to give certainty to the project. Ticket sales are also not necessarily a sign that a project will definitely go ahead or that the production phase has commenced, particularly if they occur a long time before the intended exhibition date.
Expenditure on activities directly involved in producing the production during the production phase is core expenditure and qualifies for MGETR.
Expenditure on any matters not directly involved in producing the production is not core expenditure and does not qualify for MGETR. For instance, expenditure on raising finance, advertising or marketing a production, legal fees, accountancy fees or storage costs (with exceptions – see MGETR60010).
The production phase continues until the start of the first paid public exhibition.
Running
The running phase commences at the start of the first paid public or educational exhibition and continues until the end of the last paid public or educational exhibition. It is when the production is displayed live before the paying general public or provided for educational purposes.
Expenditure on the ordinary running of the production is not core expenditure and does not qualify for MGETR. For example, expenditure on ongoing salaries for guides and security, venue costs/rent, maintenance, moving costs, travel and subsistence, administration, direction and production.
Closing
The closing phase happens after the last paid public or educational exhibition closes and marks the end of the production. It includes deinstallation, vacating the venue/venues and moving items into storage, selling them or returning them to other collections.
Expenditure on closing the production is core expenditure and qualifies for MGETR provided it does not include expenditure on activities which would not normally qualify as core expenditure, such as storage costs.