Written evidence submitted by the National Museum Directors’ Council, the Museums Association and the Association of Independent Museums


This is a joint response from the National Museum Directors’ Council, the Museums Association and the Association for Independent Museums which together represent the vast majority of the UK’s world-leading museums sector.


About the National Museum Directors’ Council

The National Museum Directors' Council (NMDC) represents the leaders of the UK's national collections and major regional museums.  Our members are the national and major regional museums in England, Northern Ireland and Scotland, the British Library, the National Library of Scotland, the National Archives and Royal Botanic Gardens Kew. In 2018/2019, NMDC’s member institutions received over 85 million visitors.


NMDC acts as an advocate on behalf of members and their collective priorities and provides them with a valuable forum for discussion and debate and an opportunity to share information and work collaboratively. While our members are funded by government, the NMDC is an independent, non-governmental organisation. 


About the MA

The Museums Association (MA) is a membership organisation representing and supporting museums and people who work with them throughout the UK. Our membership of over 12,000 includes all types of museums, from small volunteer-run local museums to large national institutions and people working in all types of roles from directors to trainees. Founded in 1889, the MA was the world’s first professional body for museums. We lead thinking in UK museums with initiatives such as Empowering Collections and Museums Change Lives, and provide £1.3m per year of funding for museum projects via our Esmée Fairbairn Collections Fund. For more information about the Museums Association, see our website: http://www.museumsassociation.org/home


About AIM

Established in 1977, the Association of Independent Museums (AIM) connects, strengthens and represents the UK’s independent heritage organisations. Through the sharing of expertise, advice and guidance AIM underpins its charitable objectives - to help heritage organisations prosper, ensuring their needs are recognised and addressed by policy makers, funders and other key sector stakeholders. AIM has a current membership of 1240, over 1000 of which are organisational members and it is supported by Arts Council England as a Sector Support Organisation. In 2019, AIM distributed over £500k through programmes, grants and awards, working closely with organisations including The Pilgrim Trust and Biffa Award.



The role of tax reliefs in rebuilding the economy and promoting economic growth and efficiency and the performance of the current regime of tax reliefs


Museums and Galleries Exhibition Tax Relief

NMDC welcomes the Treasury Committee’s inquiry into ‘Tax after Coronavirus’, particularly the call for evidence how tax reliefs can rebuild the economy and promote economic growth and efficiency.


There are a total of eight Creative Industries tax reliefs for Corporation Tax and of these eight, one is applicable to the museums and galleries which NMDC represents. The Museums and Galleries Exhibition Tax Relief which supports organisations in creating public-facing exhibitions has been transformative for the museum sector since the introduction of the relief in 2017, £20 million has been paid to 220 claims, representing 1,345 exhibitions.[1] To give an example of individual claims, the Black Country Living Museum was able to claim £12,000 for a distinct exhibition in 2018. Brooklands Museum produced three major exhibitions, all of which were permanent displays, as part of an £8 million project. Two of the exhibitions had qualifying expenditure large enough to claim the maximum 20% relief which is capped at £80,00 and for the third exhibition they were able to claim in excess of £30,000.


Unlike all other creative industry reliefs, the Museum and Galleries Exhibition Tax Relief includes a sunset clause, due to expire in 2022. Prior to the pandemic, NMDC were calling for this clause to be removed to demonstrate the government’s continued support for exhibitions, to bring parity across the creative industries, and allow museums to continue to benefit from this relief.


With the effects of coronavirus, there is even more reason for the Government to remove the sunset clause. The financial impact of coronavirus on the cultural sector has been significant. The tax relief may mean the difference between organisations being able to produce new exhibitions or simply having to abandon such projects as they fight to keep their organisations solvent.


New exhibitions have been postponed, cancelled and rescheduled often at huge cost due to the lockdown. Many museums have still not reopened following the lockdown as the financial burden of operating cannot be met by the low numbers of visitors able to enter spaces with social distancing measures in place and due to the loss of income from commercial and philanthropic sources.


The impact of Covid has resulted in organisations postponing and rescheduling exhibitions.  AIM member, the Yorkshire Sculpture Park (YSP) have done exactly that but have also extended this year’s major and most expensive exhibition beyond a year.  There is a fear that under the present time rules on M&G ETR YSP will be unable to take de-installation costs into account for the claim.  It would be useful if some dispensation to the original time limit rules was allowed to assist in the short-term.


In the current climate museums need the long-term certainty of a permanent relief. Museum exhibitions are planned often years in advance so many will currently be scheduling exhibitions for the next 2 to 3 years ahead. With the uncertainty of not knowing whether the relief will remain or be removed these plans are currently jeopardised as affordability is a primary consideration.


Removing the clause would be a simple and effective financial aid for the sector at an incredibly precarious time.


A reduction in the number of exhibitions would not only have a negative impact on institutions but also the public. It is widely accepted that now, at the of writing in August 2020, the UK is still in the middle of the pandemic thus by the proposed cessation of the relief in March 2022 it is reasonable to expect that the country will still be recovering and healing from the pandemic. Culture could help to expediate recovery. Growing evidence supports the positive link between cultural engagement and health and well-being so the Government should be maximising opportunities for the public to access cultural products rather than decreasing that likelihood through removing financial support measures from institutions on extremely tight budgets.


Furthermore, exhibitions should be encouraged due to their ability to stimulate economic growth locally. High profile exhibitions draw visitors to museums around the UK making a significant contribution to regional economies. Encouraging short stay visitors to visit other UK regions and long stay visitors to visit other towns and cities as well as London is a priority for tourism bodies. As culture rates so highly as a reason for overseas tourists to visit the UK, museums are in a prime position to deliver this. China’s First Emperor and the Terracotta Warriors attracted 610,890 visitors to Liverpool’s World Museum from February to October 2018. The exhibition attracted 208,220 staying visits to the city and made a further contribution of £78 million to Liverpool’s economy. Culture can drive economies forward and as a recession looms, the Government should be encouraging the cultural sector to maximise opportunities for economic growth and supporting the sector to contributing its full potential to the recovery from coronavirus.


Sector organisations have moved swiftly to support museums and galleries wishing to make claims, however due to the complexity of the relief and the need for interpretation of eligibility and process of making the claim, some organisations have still not claimed, though many more should be able to in future.  Therefore, it is vital that the sunset clause be removed in order to give museums, particularly small museums with less resource, certainty that their setting up arrangements to make claims will be worthwhile.


Development officers who work with regional museums have reported that a number of financial advisers to smaller museums remain unaware of the Museums and Galleries Tax Relief and in some instances have been providing museums with partial information about the scheme.  Removing the sunset clause would allow appropriate time for the relief to be widely and thoroughly understood across the sector and allow the Government to understand the wider impact of the scheme on public sector finances. 


For larger museums and galleries, it has been somewhat easier to put in place the right processes for making claims, particularly as these organisations are likely to have better access to the appropriate expertise. Many other organisations have had to seek external advice and some still lack the time, expertise or capacity to make claims.


This is a particular issue for local authority funded museums, many of whom do not have the ability to independently set up separate vehicles through which they could claim the relief, or for whom any refunded tax monies would go to their local authority rather than the museum itself.


Tyne & Wear Archives & Museums (TWAM) is a local authority joint museum service. It set up a trading company, TWAM Enterprises Ltd., in May 2018 to allow it to better develop its commercial activity. It was intended that TWAM Enterprises Ltd. would allow TWAM to claim the Museum and Galleries Exhibition Tax Relief. Unfortunately, the advice from HMRC has been that because TWAM Enterprises Ltd. is owned by four local authorities and a charity rather than a single local authority or charity it is not an eligible body to claim MGETR.

The ineligibility to reclaim this tax relief, is estimated to have cost TWAM up to £220k p.a. In order to allow TWAM to claim MGETR it has now established Exhibitions by TWAM Ltd., a company wholly owned by Newcastle City Council and therefore meeting HMRC’s ownership criteria.  Having to create an additional company to claim MGETR has significantly increased the administrative burden on TWAM and unnecessarily used up scarce resources. The issue has been raised in the House of Lords but has not been resolved.[2]


Arguably establishing a structure like TWAM Enterprises Ltd should make organisations doubly eligible rather than ineligible. A further point to consider is that TWAM Enterprises Ltd. was established in line with Government priorities for museums to work in partnership with other organisations. Ineligibility of this type of structure may deter other museums from entering into what would otherwise be economically and socially beneficial partnerships


The Museum and Gallery Exhibition Tax Relief is much needed financial boost for the sector. Removing the sunset clause and streamlining the process of applying for the relief would be a valuable way for the Government to continue to support museums during the recovery from the pandemic.


Gift Aid

Museums and galleries who are registered charities can benefit from Gift Aid. NMDC, AIM and the MA support the Gift Aid Emergency Relief Package proposal put forward by the charity sector which would provide a simple way for the Government to essential financial aid to a sector in desperate need. There are two elements to this package:


1. The introduction of Gift Aid Emergency Relief (modelled on the previous successful Gift Aid Transitional Relief scheme (in Sch 19, Finance Act 2008)). This would get much needed funds to charities across the country by temporarily changing the way that Gift Aid is calculated. The proposal is for this to take effect from the beginning of the 2020-21 tax year and stay in place for two full tax years. By making use of the existing Gift Aid claiming processes that charities already have in place with HMRC this can happen quickly and easily getting cash to charities as effectively as possible. 

2. Changes to Gift Aid Small Donations Scheme to: remove barriers for entry to ensure wider access across the full charity sector; and increase the amount that can be claimed.


These changes would demonstrate the Government’s commitment to the charity sector and be low risk as they use a tried and tested mechanism that is proven to work. Further information about the proposed changes can be found here: https://nmn.org.uk/information/2020/06/Briefing-Gift-Aid-Emergency-Relief-Package-2.pdf



September 2020




[2] https://hansard.parliament.uk/lords/2019-02-07/debates/68322B96-3913-4AA4-B7E8-B5A7A71EB228/Finance(No3)Bill.