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HMRC internal manual

Museums and Galleries Exhibition Tax Relief

Museums and Galleries Exhibition Tax Relief; qualifying exhibitions; minimum EEA expenditure

S1218ZCC Corporation Tax Act 2009

To be a qualifying exhibition for Museums and Galleries Exhibition Tax Relief MGETR) purposes at least 25% of the core expenditure (MGETR60010) on the exhibition incurred by the Museums and Galleries Exhibition Production Company (MGEPC) must be European Economic Area (EEA) expenditure.

EEA expenditure is that which is expended on goods and services originating within the 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 EEA expenditure. If however the object was borrowed from the US and a US company was used, that would not be EEA expenditure.

Pre-completion periods

Whether an exhibition meets the 25% EEA 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 EEA expenditure and this indicates that on completion of the exhibition the EEA 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 EEA expenditure is less than 25% but claims have been made as if the condition would be met.

Final statement of the core expenditure on the exhibition that is EEA 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 EEA 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 core expenditure that is EEA expenditure that can be expected to be paid out in the future.