What Costs Qualify for Museums & Galleries Exhibition Tax Relief?

Museums & Galleries Exhibition Tax Relief (MGETR) is only available on the core costs of producing a show, which are the costs of installing, deinstalling and closing a qualifying exhibition. Development work, running costs and a range of other expenses won’t qualify.

This guide sets out which costs qualify, which don't, and how HMRC decides whether a cost counts as UK expenditure. It applies to accounting periods ending on or after 1 April 2024, when the relief changed from European to UK-only expenditure.

What are core costs for MGETR?

Core costs are the costs of putting an exhibition together up to the point it opens, together with the costs of taking it down afterwards. HMRC's guidance defines them as expenditure on producing, deinstalling and closing the exhibition, with a narrow allowance for storage.

HMRC recognises four phases of an exhibition: development, production, running and closing. Only production and closing generate core costs. The legislation doesn't list eligible items, so each exhibition is assessed on what it actually involved.

Which costs qualify?

An exhibition moves from development into production once it has been green-lit. There are lots of ways to identify when you move from speculative development to production; ticket sales, hiring a venue and acquiring items for display all indicate that this has happened, but equally a formal written decision, or the commitment of funding could count too.

From the greenlight point, the following costs qualify.

Production phase (green-light to opening):

• Staff time spent on producing the exhibition
• Hiring and preparing the venue
• Acquiring works for display, such as loans or hire, though not outright purchases
• Temporary structures built solely for the exhibition, such as walls to hang exhibits or create themed rooms
• Travel and transport, where the UK is at least one end of the journey
• Security and storage of items before they go on display

Closing phase:

• Deinstallation
• Vacating the venue
• Moving or returning items

Storage after the exhibition has opened isn't normally core expenditure. It qualifies for up to four months if the exhibition is touring at two or more venues, the cost falls between deinstallation at one venue and opening at the next, and the exhibits aren't stored at a venue where the exhibition has been or will be held.

Which costs don't qualify?

Several types of cost don't qualify, whichever phase they fall into:

• Speculative development, like early concept and feasibility work, before green-light
• The cost of running the exhibition while it's open to the public, including ongoing staff salaries, venue costs, maintenance and administration
• Purchasing exhibits
• Permanent infrastructure
• Advertising, marketing, promotional material and events
• Financing, sales and distribution costs
• Legal, accountancy and audit fees, bank interest and charges, and insurance, including completion bonds

These costs shouldn’t be ignored for tax purposes. They are still part of the exhibition's separate trade, but are simply ineligible for the additional deduction.

Do your costs have to be UK costs?

Yes. For accounting periods ending on or after 1 April 2024, MGETR is calculated on core costs that are UK expenditure, meaning spend on goods and services used or consumed in the UK. Prior, eligible costs could be from the UK or the EEA.

The “used or consumed” test looks at where goods and services are used, not who supplies them, so a supplier's nationality or location has no bearing.

Your exhibition also needs to meet the 10% minimum UK spend threshold to be a qualifying exhibition.

HMRC applies the UK test to specific types of cost as follows:

• Production costs are allowable where they relate to exhibitions held at UK venues.
• Freight qualifies if any part of the journey takes place in the UK, whether it's wholly within the UK, from the UK to a destination abroad, or to the UK from abroad. Shipping between two destinations outside the UK doesn't qualify. ATA Carnet costs are allowable.
• Storage qualifies where the storage location is in the UK, even if the provider is based elsewhere.
• Staff costs are allowed if the person carrying out the work is physically in the UK, no matter their nationality or residency. This applies even if working remotely.

Touring exhibitions

Touring exhibitions need more care. Where an exhibition has some venues in the UK and some overseas, costs that relate to the exhibition as a whole, such as rights payments, must be apportioned on a just and reasonable basis. HMRC's suggested approach is to multiply the cost by the number of days the exhibition is open in the UK, divided by the total number of days it's open.

An exhibition tours to two UK venues and one overseas venue, and is open for 120 days in the UK and 60 days overseas. A £30,000 rights payment covers the exhibition as a whole, so it's apportioned by 120 ÷ 180. That makes £20,000 UK expenditure.

How do you apportion costs that cover more than one phase?

Where a cost spans qualifying and non-qualifying activity, HMRC expects a just and reasonable apportionment, applied consistently. A curator whose time runs from the development phase through to closing is a typical case. Only the time spent on production and closing counts.

Staff who split their time between the UK and overseas are treated in the same way, because workers must be physically based in the UK for their costs to be UK expenditure.

Choose a method you can explain, such as timesheets or a percentage of working days, and keep to it. For example, a salaried administrative assistant who was on board from development to closing could be apportioned by taking the days of each phase and applying the ratio of qualifying days to non-qualifying days to their salary.

How much is a claim worth on your core costs?

Your additional deduction is the lower of 80% of your core costs and your UK core costs. HMRC's own example shows how this works in practice.

An exhibition has £100,000 of core costs, all of which are UK expenditure, and generates £200,000 of income, so £100,000 of profit. The additional deduction is the lower of £80,000 (80% of core costs) and £100,000 (UK core costs), so £80,000. That leaves £20,000 of taxable profit. At a 25% Corporation Tax rate, the bill falls from £25,000 to £5,000, making a tax saving of £20,000.

The above example works different for loss-making exhibitions: if your exhibition makes a loss, you can surrender it for a payable credit at 40% for non-touring exhibitions or 45% for touring exhibitions.

A loss-making exhibition has £100,000 of core costs, all of which are UK expenditure, and generates £100,000 of income, so no profit. The additional deduction is the lower of £80,000 (80% of core costs) and £100,000 (UK core costs), so £80,000. The company surrenders the additional deduction of £80,000 for a cash credit at 40% (for a non-touring exhibition) of £32,000.

The payable credit is capped at £80,000 for a non-touring exhibition and £100,000 for a touring one.

Getting each trade to operate at breakeven by using a Special Purpose Vehicle is the most tax effective way to claim MGETR; our guide to claiming creative sector tax relief as a charity covers this in more detail.

What evidence do you need to support your costs?

Each exhibition is a separate trade, so your records need to work exhibition by exhibition. Keep:

• A breakdown of expenditure by category for each exhibition, with UK and non-UK costs shown separately
• Evidence of your active involvement in the exhibition, such as invoices for subcontracted staff, internal correspondence and timesheets
• The apportionment methods and assumptions behind your figures
• The computations showing how your additional deduction and any credit were calculated

Every MGETR claim also needs an Additional Information Form, submitted before your Corporation Tax Return, and a CT600P form. They ask for total expenditure and core costs per exhibition, so the cost breakdown above feeds straight into it.

Key takeaways

• Core costs are production and closing costs. Development, running costs and non-producing activities such as marketing and legal fees sit outside the relief.
• Only UK expenditure counts. Freight and storage have their own tests, and touring exhibitions need an apportionment of costs that cover the whole exhibition.
• Excluded costs stay in your accounts. They remain part of the exhibition's separate trade and don't earn the additional deduction.
• Apportionment must be just, reasonable and consistent. Costs that span phases or locations need a method you can explain to HMRC.
• A clear cost breakdown makes the claim straightforward. Splitting costs by phase and category, with UK and non-UK spend separated from the start, answers most of the questions HMRC is likely to ask.

If you're planning an exhibition or preparing an MGETR claim, don't leave your cost breakdown to chance. Myriad's MGETR spreadsheet is a practical way to structure your costs, and our team can review your claim with you. Contact Myriad to discuss your exhibition.