LIVE rues budget’s ‘missed opportunity’ on VAT cut

UK live music trade body LIVE has described Chancellor Jeremy Hunt’s latest budget as “another missed opportunity” after calls for a reduced VAT rate on ticket sales went unheeded once again.

Hunt did announce, however, that orchestra tax relief (OTR) would become permanent at a rate of 45%.

The current temporary 50% rate of OTR was due to taper down from April 2025 and drop eventually to its original rate of 25%. A theatre tax relief rate of 40% (and 45% for touring productions) will also remain.

“LIVE welcomes the Chancellor’s announcement that the tax reliefs for orchestras and theatres will be made permanent,” says LIVE CEO Jon Collins. “However, today’s Budget represents yet another missed opportunity to accelerate the growth of the live music sector and the wider economy while also providing urgently needed support for grassroots music through the reintroduction of a lower VAT rate.

“20% VAT on tickets in the UK is vastly out of step with our competitors in Europe and North America and has become a material factor limiting the number of gigs, tours and festivals our world class industry can put on.

“Fewer shows mean reduced economic activity in towns and cities across the country – an estimated £1m is spent in local businesses for every 10,000 people who attend a gig – and heaps further pressure onto grassroots music venues that are closing down at an alarming rate. We need urgent action to ensure the whole sector can prosper in the long term.”

Association of Independent Festivals (AIF) chief John Rostron also laments a lack of support for the sector, despite a spate of recent cancellations.

“We’re disappointed that our calls for support for the UK music festival sector have not been met”

“We’re disappointed that our calls for support for the UK music festival sector have not been met,” says Rostron. “Festivals need a temporary reduction in VAT on ticket sales from 20% to 5% in order to recover from the impact of Covid and Brexit, which has created a credit crunch that is seeing successful festivals having to postpone or cancel this year months before their events are due to take place.

“Yet another festival fell yesterday – the 15th event to fall already in 2024. Theatre has made the case for tax relief, which is being extended indefinitely. We urge the Chancellor and the Treasury to now turn to festivals and offer a fraction of that support to ensure more events do not make 2024 their last.”

UK Music interim CEO Tom Kiehl also welcomes the move to make OTR permanent.

“I welcome that the Chancellor has listened to industry calls to put in place extensions to the orchestras tax relief on a permanent basis,” he says.

“The government should use this opportunity to clarify our further calls as to whether touring choirs and other singing groups are also eligible for this important relief.

“We welcome the indirect benefit to music of the introduction other creative sector tax reliefs and seek further government consideration for the introduction of a tax credit to encourage new UK music production.”

Introduced in 2016, OTR is aimed at supporting live orchestral performances. The headline rate was rate uplifted to 50% in 2021 in the wake of Covid and was extended in 2023 for a further two years until April 2025.

The Musicians’ Union and the Association of British Orchestras were among the groups that had called to make the relief permanent.

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