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HMRC internal manual

Museums and Galleries Exhibition Tax Relief

Museums and Galleries Exhibition Tax Relief: Taxation: Profit/loss calculation: Expenditure - Timing

S1218ZBA Corporation Tax Act 2009

The rules for the timing of expenditure recognition ensure that costs are recognised when they are represented in the state of completion of the exhibition and, in particular that:

  • prepayments (where payments are made in advance of the goods or services being supplied) are not recognised until the work has been done, and
  • deferrals (where work is done or services supplied for promise of payment in the future) are recognised earlier so long as the obligation for future payment is unconditional.

For more information about when expenditure should be recognised, see BIM31080.

There are additional anti-avoidance rules to prevent companies inflating claims to Museums and Galleries Exhibition Tax Relief (MGETR) with payments that remain unpaid for long periods. These apply for the purposes of MGETR only. They do not affect the amount of expenditure for the trade, simply when an additional deduction is allowed.