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).
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.
|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.