SolvedMGETR70110 | Museums and Galleries Exhibition Tax Relief: calculation: surrenderable losses and tax credit example
From HM Revenue & Customs · Museums and Galleries Exhibition Tax Relief
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 UK 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) |
| 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.
Assuming the rates from 1 April 2025 apply, the amount of MGETC due is
£32,000 (40% x £80,000 loss surrendered) for a non-touring exhibition
£36,000 (45% x £80,000 loss surrendered) for a touring exhibition.