Tax relief for creative and cultural industries to rise
In the budget, the Chancellor has announced the tax relief of up to 50% for theatres, galleries, and other cultural organisations worth almost £250m
The government is to raise the rates of three corporation tax reliefs that are collectively referred to as the ‘cultural reliefs’. These are the theatre tax relief (TTR), orchestra tax relief (OTR), and museums and galleries exhibition tax relief (MGETR).
The rates for the theatre tax relief for non-touring will be 45% and for touring 50%. The orchestra relief tax will be 50% and the museum and galleries exhibition tax relief will be 45% for non-touring and 50% for touring. The Chancellor stated that this is a relief worth nearly £250m.
This is a rise of the current reliefs which are between 20% to 25%.
The relief is a temporary measure to help these industries recover from the Covid-19 pandemic and is planned to last for two years and five months beginning from 27 October 2021.
The rates will be tapered down from 1 April 2023 down to 30% for non-touring and 35% for touring before returning to the normal levels from 1 April 2024. The specific relief measures for museums and galleries, which was due to expire in March, will be extended by another two years.
This relief is expected to affect the exchequer by around £5m in 2021-22, by £40m in 2022-23, and by £115m in 2023-24. This will be the peak with the exchequer expecting this to drop to £70m in 2024-25, down to £15m in 2025-26, and to nil in 2026-27.
The Chancellor has also set out plans to spend about £850m over the course of three years 'breathe life' back into cultural hotspots like London's V&A museum, The Tate Liverpool, and the Imperial War Museum in Duxford. The chancellor also pledged that the funding would be provided to more than 100 museums and libraries so they could be ‘renovated, restored and revived’.
The government is also funding £800m in the Live Events Reinsurance Scheme and the recently extended the £500m Film & TV Production Restart Scheme.
The Chancellor also announced the extension of the Recovery Loan Scheme in this sector until 30 June 2022, with a 70% government guarantee for lenders on loans up to £2m this is to ensure that lenders continue to have the confidence to lend to SMEs.