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No business rates relief for UK grassroots venues

"They should turn off the music – or close down" is the message from government, says MVT, after HM Treasury confirmed venues are ineligible for a rates discount

By Jon Chapple on 07 Jan 2019

Meursault perform at the Buffalo in Cardiff, which has been forced to close, in 2012

Meursault perform at the Buffalo in Cardiff – which has been forced to close – in 2012


image © Buffalo Bar

In a further blow to Britain’s embattled grassroots venue sector, Her Majesty’s Treasury has confirmed that music venues – unlike clubs and restaurants – are not able to apply for a discount on their business rates.

In October, chancellor of the exchequer Philip Hammond announced a £900 million package of rates relief for around half a million small retailers, including bars, pubs, restaurants and retail shops.

At the time, there was hope that the discount on business rates – levied on all non-residential property in the UK, based on their ‘rateable value’ – would be extended to live music venues, which last year’s UK Live Music Census found were being disproportionately harmed by soaring rates.

However, in a letter to Mark Davyd of Music Venue Trust (MVT), HM Treasury policy adviser Tom Hetherton confirms that won’t be the case, stating the discount will only be available to “occupied properties with a rateable value of less than £51,000 that are wholly or mainly being used as shops, restaurants and drinking establishments”.

“The guidance sets out that the government does not consider music venues to be eligible for the retail discount, unless they are considered by local authorities to be similar in nature to those properties listed in the guidance,” continues Hetherton.

According to Davyd, MVT has “detailed the impact of the annual review 2017 of business rates to every department of government that can take action on this matter: DCMS [Department of Culture, Media and Sport], MHCLG [Ministry of Housing, Communities and Local Government], Treasury.

“Business rates as a potential source of the closure of music venues has risen to the top of the agenda”

“No action has been taken by government, and now we have a definitive statement from HM Treasury that even when relief from the impact of that review is created, it should not include grassroots music venues.

“We have repeatedly offered a meeting to Treasury to explain how damaging this decision is, but they have refused to either meet or to accept evidence from us on behalf of the venues impacted.”

In a November 2017 letter to Hammond, UK Music chief exec Michael Dugher outlined how a planned 4% rise in business rates, coupled with the ‘revaluation’ announced in February that year, sent the rateable value of many venues to “catastrophic” and “woefully unjust” levels.

The most recent UK venue closure is the Buffalo in Cardiff – played by the likes of Adele, James Blake, Stormzy and Disclosure in their early careers – which announced last week it is shutting owing to pressures from rates rises.

“I’m not sure what can be done at this point,” concludes Davyd, “but, as highlighted in the Mayor of London’s review in 2017, the issue of business rates as a potential source of the closure of music venues has now risen to the top of the agenda.

“Essentially, the message from HM Treasury to grassroots music venues is that if they wish to obtain tax advantages, or even relief from additional taxes, they should turn off the music. Or close down.”

“This is a perfect opportunity for government to take action on the challenges faced by grassroots music venues”

Following the letter to Davyd being made public, MVT and umbrella organisation UK Music have written to Hammond to accuse the chancellor of discriminating against music venues over the business rates.

In a letter jointly signed by Davyd and UK Music CEO Michael Dugher, the organisations describe government policy on rates as “discriminatory towards grassroots music venues.

“It fails to acknowledge these venues are similar in nature to pubs and bars and that they should not be eligible for the retail business rates discount as a result,” they write.

“Bars, pubs and music venues have a number of obvious similarities: they are all customer-focused experiences whose core business is to provide entertainment, food and drink for the benefit of patrons.

“We kindly ask that you change the guidance by stating that music venues are similar in nature to pubs and bars for the purposes of the scheme.”

Davyd concludes: “This is a perfect opportunity for government to take action on the challenges faced by grassroots music venues.”

 


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