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Autumn Budget 2021: Creative industry tax reliefs

Stuart Weekes, Partner, Corporate Tax
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The government is aware of the impact of the recent pandemic on the creative arts sector and has provided additional tax support through the Creative Tax Reliefs. These reliefs provide incentives to companies that invest in the creative arts sectors.

Museum and Galleries Exhibition Tax Relief (MGETR) will be extended for a further two years until 31 March 2024. In addition, the government will increase the rates of Theatre Tax Relief, Orchestra and the Museum and Galleries Exhibition Relief to 45% or 50%. From 1 April 2023, these rates will be tapered back and from 1 April 2024 will revert to 20% or 25%. The Museum and Galleries Exhibition Tax Relief will then cease.

Anti-avoidance measures will also be introduced from April 2022 to ensure that these reliefs have the desired benefit and are not abused.

For companies involved in the production of exhibitions, productions or concerts and qualify for this relief, this results in a real corporation tax saving. The short-term boost in the reliefs available may provide a further incentive for companies to be involved.

The existing rules for MGETR contain a cap on the relief a company can claim where it surrenders losses for a tax repayment. Oddly, there was no proposal to increase or temporarily remove this cap. If that is not adjusted, this would mean that in many cases those companies will not be able to fully benefit from this temporary rate change.

For those companies that do benefit from these changes, many of these productions can take years to come to fruition. It is unclear whether this short-term boost will provide the incentive required to encourage more companies to invest in creative arts, a sector that is so much in need of genuine and sustained long-term investment.

To discuss how the announcements will impact your organisation please get in touch with Stuart Weekes or your usual Crowe contact.

Autumn Budget 2021

What do the announcements mean for you and your organisation?

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Stuart Weekes
Stuart Weekes
Partner, Corporate Tax
Thames Valley