Extension to Museum and Galleries Exhibition Tax Relief sunset clause
Published 27 October 2021
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This publication is available at https://www.gov.uk/government/publications/extension-to-museum-and-galleries-exhibition-tax-relief-sunset-clause/extension-to-museum-and-galleries-exhibition-tax-relief-sunset-clause
Who is likely to be affected
Incorporated museums, galleries and other qualifying heritage institutions, including those run as charitable companies, their subsidiaries or those with trading subsidiaries that are run under the control of a local authority, that are directly involved in the production of new exhibitions.
General description of the measure
The tax relief available for qualifying companies in the museum and gallery sectors is due to expire in March 2022. The relief will be extended to 31 March 2024 to continue to benefit the sector.
Policy objective
The Museums and Galleries Exhibition Tax Relief (MGETR) includes a sunset clause which means that the relief will expire in April 2022 unless renewed.
It was originally intended that the government would review the relief in 2020 and then set out future plans for the relief.
The sector has been particularly affected by the coronavirus (COVID-19) pandemic and the review has been delayed. Companies need certainty regarding the relief when setting out their plans over the next year.
The government will extend the relief for two years, to 31 March 2024. During this period, the relief will continue to be monitored, with a view to making a long-term decision regarding its future.
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.
Detailed proposal
Operative date
The measure will have effect on and after the date of Royal Assent to Finance Bill 2021-22.
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 2022 unless renewed. The relief will be extended for two years, so that it expires on 31 March 2024 (unless extended).
Summary of impacts
Exchequer impact (£m)
| 2021 to 2022 | 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 |
|---|---|---|---|---|---|
| — | nil | -5 | -10 | -5 | — |
These figures are set out in Table 5.1 of Autumn Budget 2021 and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Autumn Budget 2021.
Economic impact
This measure is not expected to have any significant economic impacts.
The terms used in this section are defined in line with the Office for Budget Responsibility’s indirect effects process. This will apply where, for example, a measure affects inflation or growth. You can request further details regarding this measure at the email address listed below.
Impact on individuals, households and families
There is no impact on individuals as this measure only affects businesses. There is expected to be no impact on family formation, stability or breakdown.
Equalities impacts
It is not anticipated that there will be impacts on groups sharing protected characteristics.
Impact on business including civil society organisations
This measure is expected to have a negligible impact on the costs for the approximate 1500 museum businesses that are potentially within the scope of this relief, by allowing them to continue to claim tax relief on exhibitions produced until 31 March 2024. One-off costs will include familiarisation with the change. Continuing costs could include increased record-keeping and accountancy requirements in order to file tax returns and make claims after 2022. Companies can choose whether to claim 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 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)
Any operational impact is expected to be negligible.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be kept under review through communication with affected taxpayer groups. HMRC will monitor this measure through the analysis of claims data and the publication of summary statistics.
An external review of the relief was launched in 2020 and due for publication in 2022.
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.