Corporation Tax Act 2009 section 1218ZBD

When costs are taken to be incurred

Section 1218ZBD establishes the rules for determining when costs are treated as having been incurred for the purposes of museums and galleries exhibition tax relief.

• Only costs that have actually been paid can be included when calculating exhibition tax relief at any given point in time.
• Unpaid amounts may only be included if there is an unconditional obligation to pay them — that is, a firm commitment with no strings attached.
• Where an obligation to pay is linked to the exhibition earning income, that obligation is not treated as unconditional until a corresponding amount of income has been recognised in the accounts.
• These rules prevent companies from claiming relief on costs that are speculative or contingent on future uncertain events.