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UK government slashes VAT on concerts

Another #LetTheMusicPlay objective fulfilled, as British chancellor Rishi Sunak announces a 15% reduction in value-added tax on live events until the end of the year

By IQ on 09 Jul 2020

VAT tax return

image © SME Loans (CC BY 2.0)

The British government has announced that value-added tax (VAT) levied on concert and event tickets will be reduced to 5% from next week.

A cut in VAT was one of three main demands of last week’s #LetTheMusicPlay campaign, along with a financial support package and a timeline with reopening music venues without social distancing. Following the announcement of on Sunday of a £1.57 billion aid package for the cultural sector, only the call for a confirmed date for reopening remains unfulfilled.

The VAT cut was announced late yesterday (8 July) by culture minister Oliver Dowden, following a ‘mini-budget’ that afternoon by chancellor of the exchequer Rishi Sunak. According to Dowden, the reduction in VAT from 20% to 5% will apply to concerts, theatre shows, exhibitions, circuses and other “attractions”.

The reduction will last for six months from 15 July, said Sunak.

As for a timetable on reopening, Dowden says the government will “announce further steps on [the] path to reopening shortly”.

In a statement, the Entertainment Agents’ Association welcomed the VAT reduction but said clarification is needed on where the cut-off point will be. “[A]s we can’t open any [venues] at the moment, we need to know if this applies to tickets bought before the end of Jan for events in 2021,” the association says.

Concert Promoters’ Association chair Phil Bowdery comments: “Yesterday’s announcement on the VAT reduction for ticket sales is a significant show of support for our industry from the government and is a sign that they are willing to work with us to find targeted measures to support this vital part of the UK economy. We want to thank the government, and in particular Oliver Dowden and Rishi Sunak, for their support and the confidence they have shown in the iconic UK live music industry.”

“To unlock the potential value this creates, we urgently need some firm commitments to reopening dates”

“We also know there is lots more to do and our industry is not out of the woods yet, and we will continue to work hard with the government to get the support the industry needs over the coming months.”

National Arenas Association chair Lucy Noble adds: “The measures the chancellor announced yesterday include a hugely welcome reduction in VAT from 20% to 5% for various sectors, including tickets for concerts. We are extremely grateful to the chancellor, treasury ministers and DCMS [department for digital, culture, media and sport] for listening to us and for their willingness to consider and implement measures to support the music industry at this critical time.”

“We warmly welcome this sensible intervention into the live music sector, which responds directly to the asks we made of the government for the support we need,” says Mark Davyd, CEO of Music Venue Trust. “To unlock the potential value this creates, we urgently need some firm commitments to reopening dates and some guidelines that would allow us to get tickets on sale and benefit from this tax cut.”

 


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