Arts, culture and heritage charities have become increasingly dependent on creative tax reliefs in recent years as sources of grant funding have been cut, according to a report in Charity Finance magazine.
A number of new tax reliefs for arts, culture and heritage charities have been introduced in recent years including the museums and galleries tax relief, available since April 2017, as well as orchestra tax relief, available since April 2016, and theatre tax relief, available since September 2014.
According to HMRC figures, there were 910 successful claims for theatre tax relief in 2017/18 amounting to £77m, up 67 per cent from the £46m paid out in 2016.
A total of £137m has been awarded to almost 5,000 theatre productions since that scheme began.
One charity that has taken advantage of this tax relief is the Royal National Theatre, which is using creative tax reliefs to offset cuts in Arts Council funding.
According to the trustees, the “Arts Council grant has been cut by £2.9m since 2010/11, representing a real terms reduction of 30 per cent.”
As a result, the Royal National Theatre has become “increasingly dependent in recent years on theatre and film tax credits, which in 2017/18 amounted to £4.6m”.
Meanwhile, £6.6m has been paid out in orchestra tax relief on 205 productions since 2016.
There are no statistics available yet on claims for museums and galleries tax relief.
Speaking to Charity Finance, Richard Weaver, haysmacintyre’s head of charities and not-for-profit, said these reliefs have been welcome but said charities should be better prepared to apply for them.
He said: “Creative sector tax reliefs are a welcome source of support for charities active in the heritage, arts and culture sector, but charities do need to be aware of the practicalities involved in applying for them and the time lag between putting in a claim and receiving the money.”
The government has extended the deadline for charities to apply for musuems and galleries tax relief.
Museums and galleries now have until 4 January 2019 to apply to reclaim VAT incurred on most goods and services purchased in order to fund free admissions.
The scheme was re-opened in May 2018 to all relevant organisations that meet the following criteria:
• Be open to the general public for at least 30 hours per week, without exception
• Offer free entry, without prior appointment
• Hold collections in a purpose-built building
• Display details of free entry and opening hours on the museum website
Museums and galleries are required to provide as part of the application process: proof of
Arts Council England Accredited status, visitor figures, information on education programmes and community engagement work.
Upon admission to the scheme museums or galleries will be required to provide visitor figures on a bi-annual basis and commit to continuing to provide free entry.