An independent review has found cultural organisations that claim tax relief earn 37% more income annually than those that don’t – equal to an average of £44,200 per organisation.
Museums and galleries collectively claimed £115m through tax relief for 11,145 exhibitions between April 2017, when the initiative was first introduced, and April 2024.
Museums and Galleries Exhibition Tax Relief initially offered 20% in tax relief for touring exhibitions and 25% for non-touring exhibitions. These rates were increased to 45% and 50% during the Covid pandemic before being permanently set at 40% and 45% in 2024.
An independent review commissioned by Arts Council England (ACE) has found that cultural tax relief schemes for museums and galleries, as well as theatres and orchestras, enable participating bodies to put on more exhibitions and therefore boost their income.
The report found that:
- Cultural tax relief claimants earned 37% more income annually after adoption compared to non-claimants. On average, this equated to an additional £44,200 in earned income annually per organisation.
- Claimants earned 162% more income from international activity than those that did not claim cultural tax relief. On average, this equated to an additional £16,500 more income from international activity annually per organisation.
Advertisement
Museums and galleries that claim exhibition tax relief are able to put on six more exhibitions (both touring and on-site) on average annually than those not claiming relief.
Recipients taking part in the research agreed that cultural tax relief allowed their organisation to increase the number of international touring dates, and had a positive impact on their financial resilience and ability to employ staff.
Organisations claiming tax relief were also able to increase the number of concessionary tickets offered, with concessionary tickets making up 3.8% more of total tickets sold or given. On average, this is equivalent to an additional 32 concessionary tickets offered annually by cultural tax relief claimants.
The report makes a number of recommendations, including extending the definition of museums and galleries exhibition tax relief “qualifying costs” to include exhibition running costs, such as wages for temporary staff or increased hours for existing front-of-house, marketing and operating staff.
This, the report says, would lead to an average of 29 more exhibitions and displays, 322,800 more visitors and £729,000 more income, as well as boosting freelance employment and staff pay.
According to figures published last year by the Office for National Statistics, museums made 270 claims for a total of £28m in the 2023/24 financial year.
The highest proportion of claims were for smaller amounts, with 31% of all claims being for £25,000 or less. Only 13% of claims were for over £200,000, but these accounted for 54% of the total amount of relief paid.
Can my museum claim tax relief?
Museums and Galleries Exhibition Tax Relief is available for qualifying primary and secondary production companies that put on a qualifying exhibition.
A qualifying company needs to maintain a museum or gallery and be either a charitable company or a company wholly owned by a charity or local authority.
A primary production company must:
- make an effective creative, technical or artistic contribution
- be actively engaged in planning and decision-making.
- directly negotiate, contract and pay for rights, goods and services.
- be responsible for producing and running the exhibition at a venue.
If the exhibition is held at two or more venues, there may be secondary production companies.
A secondary production company must be:
- responsible for producing and running the exhibition at a venue.
- actively engaged in decision-making in relation to that venue.
A qualifying exhibition:
- A curated public display of an organised collection of objects or works considered to be of interest scientifically, historically, artistically or culturally.
- Can be a single object.
- Has at least 25% of core costs spent on goods or services that are provided from within the UK or the EU, Norway, Iceland and Liechtenstein known as the European Economic Area – as of 1 April 2024, at least 10% of core costs must relate to activities in the UK.
Core costs are those spent on:
- producing the exhibition.
- uninstalling and closing the exhibition if it’s open for one year or less.
Your company cannot claim the relief for exhibitions:
- which are organised in connection with a competition.
- which are not held in person, for example, online exhibitions.
- which include a live performance by any person, except where this is incidental.
- where anything displayed is for sale and/or alive.
A touring exhibition must meet these additional requirements:
- the exhibition must be held at more than one venue.
- at least 25% of the objects or works displayed at the first venue must be displayed at every subsequent venue.
- there should be no more than six months between uninstalling at one venue and installation at the next venue.
- there must be a primary production company for the exhibition, which is within the charge to Corporation Tax.
- the primary production company must intend from the planning stage that the exhibition will be touring.