Museums welcome tax relief extension for exhibitions
Sector works together to secure tax relief on permanent exhibitions as part of the autumn statement
Museums seeking to claim the new tax relief on permanent and temporary exhibitions must set up a trading company or subsidiary to qualify.
The plan to extend the tax relief on temporary exhibitions, a measure announced in last spring’s budget, to include permanent exhibitions was confirmed in November’s autumn statement. The changes will apply from April.
Small to medium-sized museums now stand to benefit from the relief. It was previously feared that venues unable to host temporary or touring exhibitions would miss out on the opportunity to claim.
Alistair Brown, the policy officer at the Museums Association, acknowledges that tax relief is a “complex” way to offer the sector a boost, as it is available only to organisations liable for corporation tax.
“It is a relatively easy process to set up a company, although it may be complex for local authority and small museums,” says Brown. “However, setting up a company might also spur some museums that aren’t engaged in other commercial activities to become more entrepreneurial.”
The announcement has been widely welcomed by the sector, which has been lobbying the government since a consultation on the original tax relief on temporary exhibitions was opened in September.
According to Brown, expansion of the tax relief shows how arts and cultural organisations and institutions can work together. “It is a strong example of the sector working together to find a solution for all museums and institutions,” says Brown. “Museums now need to apply.”
Stephen Deuchar, the director at the Art Fund, says: “We welcome news in the autumn statement that the much needed tax relief for exhibitions will be extended to permanent as well as temporary and touring shows.”
Boost of £30m
Museums and galleries in the UK stand to benefit from a £30m boost from the measure. Tax relief rates will be set at 25% of qualifying expenditure for touring exhibitions and 20% for non-touring exhibitions, which mirrors tax relief rates in the theatre sector. However, there is a £500,000 cap on qualifying spend per exhibition.
There is also a “sunset clause” that will involve the tax relief expiring in 2022, unless it is extended.
The government has already acknowledged that museums, in particular, need “certainty to plan exhibitions in advance”, so a review of the tax relief initiative is expected in 2020, to set out plans for after 2022.
Brown describes the clause as a “review mechanism”. He says: “It will give the government an opportunity to see if it is actually delivering a benefit to the public.”
Chancellor Philip Hammond also used the autumn statement to confirm plans to make Gift Aid more accessible. This includes allowing organisations to be registered as a charity for two years, rather than three.
“Any move to simplify procedures, so more museums can take advantage of Gift Aid, is welcome,” says Brown.
“A lot of small museums have not been positive about it because of the administrative bells and whistles.”
Among the organisations awarded funds from the Libor Trust, created from fines levied on banks in the wake of the Libor scandal, were Aberdeen Museums Development Trust and the RAF Museum.
“It is always welcome, but this is not a strategic way of funding culture,” says Brown. “It doesn’t replace public funding.”
The plan to extend the tax relief on temporary exhibitions, a measure announced in last spring’s budget, to include permanent exhibitions was confirmed in November’s autumn statement. The changes will apply from April.
Small to medium-sized museums now stand to benefit from the relief. It was previously feared that venues unable to host temporary or touring exhibitions would miss out on the opportunity to claim.
Alistair Brown, the policy officer at the Museums Association, acknowledges that tax relief is a “complex” way to offer the sector a boost, as it is available only to organisations liable for corporation tax.
“It is a relatively easy process to set up a company, although it may be complex for local authority and small museums,” says Brown. “However, setting up a company might also spur some museums that aren’t engaged in other commercial activities to become more entrepreneurial.”
The announcement has been widely welcomed by the sector, which has been lobbying the government since a consultation on the original tax relief on temporary exhibitions was opened in September.
According to Brown, expansion of the tax relief shows how arts and cultural organisations and institutions can work together. “It is a strong example of the sector working together to find a solution for all museums and institutions,” says Brown. “Museums now need to apply.”
Stephen Deuchar, the director at the Art Fund, says: “We welcome news in the autumn statement that the much needed tax relief for exhibitions will be extended to permanent as well as temporary and touring shows.”
Boost of £30m
Museums and galleries in the UK stand to benefit from a £30m boost from the measure. Tax relief rates will be set at 25% of qualifying expenditure for touring exhibitions and 20% for non-touring exhibitions, which mirrors tax relief rates in the theatre sector. However, there is a £500,000 cap on qualifying spend per exhibition.
There is also a “sunset clause” that will involve the tax relief expiring in 2022, unless it is extended.
The government has already acknowledged that museums, in particular, need “certainty to plan exhibitions in advance”, so a review of the tax relief initiative is expected in 2020, to set out plans for after 2022.
Brown describes the clause as a “review mechanism”. He says: “It will give the government an opportunity to see if it is actually delivering a benefit to the public.”
Chancellor Philip Hammond also used the autumn statement to confirm plans to make Gift Aid more accessible. This includes allowing organisations to be registered as a charity for two years, rather than three.
“Any move to simplify procedures, so more museums can take advantage of Gift Aid, is welcome,” says Brown.
“A lot of small museums have not been positive about it because of the administrative bells and whistles.”
Among the organisations awarded funds from the Libor Trust, created from fines levied on banks in the wake of the Libor scandal, were Aberdeen Museums Development Trust and the RAF Museum.
“It is always welcome, but this is not a strategic way of funding culture,” says Brown. “It doesn’t replace public funding.”