MGETR70110 - 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 European 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)
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 European expenditure. Income to date from the exhibition is £90,000. 

(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.