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HMRC internal manual

Museums and Galleries Exhibition Tax Relief

Museums and Galleries Exhibition Tax Relief; calculation; surrenderable losses and tax credit example

The following example illustrates how a Museums and Galleries Exhibition Production Company (MGEPC) that sustains a surrenderable loss, can surrender that loss in return for a Museums and Galleries Exhibition Tax Credit (MGETC). 

Example

A MGEPC undertakes an exhibition with total core expenditure of £100,000, all of which is EEA expenditure. Income to date from the exhibition is £90,000. 

Income £90,000
   
Expenditure (£100,000)
Trading loss before Museums and Galleries Exhibition Tax Relief (MGETR) (£10,000)
MGETR - Additional deduction (80% x £100,000 total core expenditure) (£80,000)
Trading loss after MGETR (£90,000)

The surrenderable loss is the lesser of:

  • the £90,000 trading loss after MGETR, and
  • the £80,000 additional deduction.
     

In this case the company can surrender up to £80,000, and chooses to surrender the full amount.  The company is not obliged to surrender the entire loss, but it will most likely do so.

The amount of MGETC due is

  • £16,000 (20% x £80,000 loss surrendered) for a non-touring exhibition
  • £20,000 (25% x £80,000 loss surrendered) for a touring exhibition.