UK gov backs £330bn of loans for businesses
The UK chancellor of the exchequer, Rishi Sunak, has today (17 March) announced a £330 billion package of guaranteed loans for the country’s businesses.
Further measures include a business rates exemption for venues and other businesses in the leisure, hospitality and retail sectors, regardless of rateable value, and grants of up to £25,000 for businesses with a rateable value of under £51,000.
From the start of next week, the government will additionally extend its business interruption loan scheme for small- and medium-sized enterprises, which will offer loans of up to £5 million, interest free for the first six months, and support liquidity among larger firms.
Those affected by the virus will also be offered a three-month mortgage holiday, while the chancellor said he is prepared to “offer whatever further financial support” he decides is necessary.
Social venues, pubs, clubs and theatres that have pandemic cover will now be able to claim against their insurance, Sunak added.
The measures come following yesterday’s advice that UK citizens stop all “non-essential contact” and avoid public gatherings, in a move that caused “uncertainty and confusion” among the country’s live music industry.
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UK govt abolishes business rates for small venues
Businesses with a rateable value of below £51,000 will not pay any business rates – the tax levied on non-domestic property in the UK – for the next year, in what comes as a boost to the country’s grassroots music sector.
UK chancellor Rishi Sunak announced the rates abolishment today (11 March) as part of the government’s budget for 2020, which focuses on how to ease the economic impact of the Covid-19 outbreak. The rates relief will run from April 2020 for twelve months.
Full business rates relief previously only applied to firms with a rateable value – the value used to determine payable business rates, based on size, location and other factors – of below £12,000.
“In our manifesto last year, the government promised to increase their business rates retail discount by 50%, but we can go further,” says the chancellor. “We are taking the exceptional step of abolishing business rates altogether.”
The tax cut, says Sunak, is worth over £1 billion and is set to save each business up to £25,000.
A review into the long-term future of business rates will be concluded by the autumn.
“We are taking the exceptional step of abolishing business rates altogether”
In 2017, a 4% hike in business rates saw the overheads paid by many small businesses across the UK skyrocket. Grassroots venues in particular have suffered, having remained exempt from the tax relief granted to other small retailers for years.
Venue operators across the UK celebrated a 50% cut in rates in January, calling it “a profound and positive step” for the sector.
That same month, iconic London music venue the 100 Club became the first venue in the country to receive full business rates relief, under a new scheme put forward by Westminster City Council.
The venue, which has played host to the Rolling Stones, Oasis and the Sex Pistols, has been on the brink of closure at least three times in the past decade, with a third of UK venues closing in the same time period.
Speaking at Futures Forum on Friday, Mumford & Sons’ Ben Lovett, who operates London venues Omeara and Lafayette, lamented the loss of many UK grassroots venues and stressed the importance of having venues of all sizes for artists to perform in.
Mark Davyd of the Music Venue Trust (MVT) comments: “Music Venue Trust very warmly welcomes additional measures announced by HM Government in the budget to tackle the developing crisis provoked by Covid-19. We are particularly pleased that alongside the additional cut to business rates, the challenges Covid-19 presents to the smallest grassroots music venues, many of whom are too small to be in the existing business rates system, will be addressed via the small business grant fund, providing grants of up to £3000 to manage the emerging negative impacts.
“The coronavirus outbreak presents a new challenge for the live music industry and this welcome step will be a lifeline for some at this critical time”
“It remains the case that too many grassroots music venues in the UK have rateable valuations which are simply too high to benefit from either of these measures,” continues Davyd, “and those venues will need additional measures bringing forward to enable them to withstand this crisis.
“We also welcome the commitment to a review of business rates to be carried out this year, with the hope that this review will finally result in the creation of an accurate and relevant classification for grassroots music venues that will see an end to them being unfairly penalised in this outdated system.”
Acting UK Music CEO Tom Kiehl adds that the chancellor should “be hugely congratulated” for scrapping business rates.
“Music venues are the lifeblood of our industry,” continues Kiehl. “However, many are fighting for survival and need all the help they can get to remain open.
“The coronavirus outbreak presents a new challenge for the live music industry and this welcome step will be a lifeline for some businesses at this critical time.
“We ask the Government to constantly review financial support available to music businesses and employees in response to coronavirus and consider making further changes.”
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The 100% Club: London venue gets full biz rates relief
Iconic London music venue the 100 Club has become the first venue in the country to receive full business rates relief, under a new scheme to protect grassroots venues, put forward by Westminster City Council.
The 100% relief from business rates – the tax levied on non-residential property in the UK – will save the 100 Club over £70,000 a year, according to charity the Music Venue Trust, after the measures come into place on 1 April 2020.
The move helps to secure the future of the venue, which has hosted the likes of the Rolling Stones, Oasis, the Sex Pistols and Louis Armstrong since opening in 1942.
The 100 Club has been on the brink of closure at least three times in the past decade, saved by efforts from Westminster Council, Paul McCartney, Converse, Fred Perry and MVT.
Under the plans, music venues in Westminster are eligible for full relief if they are primarily a grassroots music venue and appear on the Greater London Authority’s register as such; the organisation running the venue is not for profit; and the venue is the borough of Westminster, preferably in the area of Soho.
“This is a game-changing approach from a local authority in supporting grassroots music venues”
The news comes as the UK live music industry celebrates the government’s decision to cut business rates in half for all eligible small- and mid-sized grassroots venues, announced earlier this week. Venues had previously remained exempt from the rates relief granted to other small retailers, such as bars and restaurants.
“I’m thrilled the 100 Club has been granted this new business rates relief. It means we can continue to support the careers of the hundreds of artists who take to our stage each year,” comments venue owner Jeff Horton.
“This is a game-changing approach from a local authority in supporting grassroots music venues. I hope that other local authorities will adopt a similar forward thinking approach to support the music industry.”
“Grassroots music venues play a key role in London’s thriving nightlife,” says London’s night czar Amy Lamé. “That is why we’ve worked closely with The 100 Club and Westminster City Council to secure its future.”
The night czar, who was appointed in 2016 to protect London’s nightlife, adds that the news serves “as a great example of what can be done to support venues in our city.”
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UK industry reacts to venues business rates cut
Venue operators and others from across the UK live industry have expressed their support for a 50% cut in business rates for small- and mid-sized grassroots music venues, in a “much-needed” boost for the country’s live venues.
After several years of campaigning by charity the Music Venue Trust (MVT), umbrella organisation UK Music and others, the government has slashed business rates – the tax levied on non-residential property in the UK – by half for music venues, saving grassroots music venues an average of £7,500 a year.
The decision releases over £1.7 million back into the grassroots live music sector, benefitting 230 venues across England and Wales. The news follows the establishment of a £1.5m Arts Council England fund dedicated to the grassroots sector last year.
The announcement comes as Independent Venue Week kicks off in the UK. Over 800 live shows will take place throughout the week at the UK’s best independent venues, including performances by Nadine Shah at the Cluny (300-cap.) in Newcastle, Frank Turner at the Exeter Tavern (220-cap. and Anna Calvi at the Windmill Brixton (150-cap.) in London.
“This is incredibly welcome news,” Tom Kiehl, deputy CEO of UK Music, tells IQ. “We have campaigned hard to get the recognition that music venues should qualify for rates relief.
“There is no uniform issue behind venue closures and other challenges remain in terms of planning and licensing, but this will make a real difference and will give more stability for venues, especially those living on the breadline,” says Kiehl, who notes the rates relief is a “profound and positive step” for the UK talent pipeline.
“We thank the government for being so forthcoming.”
“This will make a real difference and will give more stability for venues, especially those living on the breadline”
A 2017 hike in business rates has had a harmful effect on UK grassroots venues over the past few years, with venues being exempted from the tax relief granted to other small retailers. Over a third (35%) of UK venues have closed down in the past decade, including DHP Family’s the Borderline, which had hosted acts including Debbie Harry, Blur, Muse and Amy Winehouse over more than 30 years in business.
Venue operators have also reacted positively to the news. Richard Buck, CEO of TEG MJR comments: “We very much welcome the change in business rates. It’s a much-needed, positive step which will benefit the grassroots venues that are the foundations of our industry.”
The former MJR Group, which was acquired by Sydney-based TEG in August, looks after venues including the Tramshed (1,000-cap.) in Cardiff, the Mill (1,000-cap.) in Birmingham and the Warehouse (750-cap.) in Leeds.
Julie Tipping from Nottingham-based promoter and venue operator DHP Family says MVT has done “a fantastic job getting a significant discount rate relief for some grassroots venues”. However, they “are not yet sure what impact this will have for DHP’s venues”, which include London venues the Garage (600-cap.), Oslo (375-cap.) and the Grace (150-cap.), as well as award-winning boat venue Thekla (400-cap.) in Bristol.
“It’s a much-needed, positive step which will benefit the grassroots venues that are the foundations of our industry”
“It’s great news for grassroots venues in this country that are eligible,” adds Tipping, “the question will be how many that is and what will happen to any that don’t get this benefit in the long term.
“Everyone seems to agree that taxing bricks and mortar is outdated in an increasing digital age, so we need government to come up with a fairer taxation system.”
Bert Van Horck, CEO of independent UK promoter and venue operator VMS Live says: “We’re delighted that the government is supporting this important cultural sector with a reduction in business rates that will help up and coming talent.”
VMS Live, which operates mid-sized UK venues including Eventim Olympia Liverpool (1,960-cap.), Asylum in Hull (1,100-cap.) and the William Aston Hall in Wrexham (1,200-cap.), is dedicated to “operating the venues at the start of artists’ creative journey”, adds Van Horck.
“Business rates are one of our largest annual overheads,” says Rebecca Walker, assistant general manager of the Leadmill (900-cap.) in Sheffield.
“Everyone seems to agree that taxing bricks and mortar is outdated in an increasing digital age”
“Thanks to the incredible work of all of the MVT team, this significant reduction will really help us to invest in not only music and the arts, but the staff and infrastructure needed to continue putting on great shows for the people of Sheffield.”
Toni Coe-Brooker, of venue manager of the Green Store Door in Brighton (200-cap.), says the team is “relieved” by the news.
“The rate relief we will receive as a grassroots music venue will make a significant impact on our ability to continue doing what we do, supporting our local community and incubating new talent.”
Mark Davyd, CEO and founder of MVT, says the news is “another foundation stone” in the building of a “vibrant, sustainable, world class grassroots music venue sector”.
Davyd admits there is “still a lot to be done on this issue”, with collaboration needed with governments in Scotland and Northern Ireland to ensure “a level playing field” for venues’ access to business rates and public subsidies across the UK.
“It’s now time for recording, streaming and publishing interests to play their part,” adds Davyd. “Billions of pounds in revenue are being generated in the music industry from the music that is tested, developed, finds its audience and emerges from these vital spaces. PRS for Music, PPL, Universal, Warners, Sony, Spotify, Apple and Google now need to come to the table and tell us what they are going to do to make sure that continues to happen.”
This article will be updated with reactions as we receive them.
London venue the Borderline closes after 30 years
London venue Borderline has announced it will close its doors this summer, after more than 30 years hosting acts including Debbie Harry, Blur, Muse, Amy Winehouse and the 1975.
Promoter and venue operator DHP Family, who bought the Borderline from Mama in 2016, has made the decision to close the 300-capacity venue by August 31 in the face of “ever increasing rents, rising business rates and ongoing redevelopment plans for Soho”.
According to music charity the Music Venue Trust (MVT), 35% of UK grassroots music venues have closed in the last decade. A 4% rise in business rates –the tax levied on non-residential property in the UK – has caused further problems for music venues, which are not eligible for the tax rebates applicable to other small businesses. Escalating London rents have also impacted many venues.
“This has been a difficult decision, but given intentions by the landlord to increase the rent significantly for a second time since we took it over in 2016 as well as plans to redevelop the building housing the Borderline, we now know the venue doesn’t have a long term future so it makes no sense for us to continue to invest,” says DHP Family managing director George Akins.
“This is a sad day for all of us who love live music and believe in grassroots venues”
“We’ve had an amazing two years at Borderline with some fantastic shows and want to thank everyone for their support from agents, promoters and artists to all the thousands who have come to the gigs and club nights.
“We’ve put our all into trying to revive this iconic venue but unfortunately, it has been impossible to turn into a sustainable operation due to so many external factors. This is a sad day for all of us who love live music and believe in grassroots venues,” adds Akins.
DHP has retained the Borderline names and will consider opportunities to relocate the venue.
Akins says that DHP is “still committed to creating and running the best grassroots music venues in the country.” The company plans to reinvest in other parts of its portfolio, setting aside £1 million for work on Bristol’s Thekla, preparing for the 40th anniversary of Rock City in Nottingham and working on the opening of its first venue in Birmingham.
The announcement comes in the midst of a spate of good news for UK grassroots venues, as fellow DHP-owned London venue, the Garage, last week won protection from the local council which has pledged to safeguard the venue in case of area redevelopment and MVT recently announced £1.5 million in funding to protect and improve grassroots music venues, as well as support from industry-led initiatives.
UK Music: Spring Statement “missed opportunity”
UK Music chief executive Michael Dugher has called chancellor of the exchequer Philip Hammond’s Spring Statement a “missed opportunity” to help grassroots venues, but vows to continue campaigning.
Dugher, along with Labour’s shadow culture minister Kevin Brennan, met chancellor Hammond in February for urgent talks regarding business rates relief for grassroots music venues.
The music industry representatives urged Hammond to ensure live music venues benefit from the new business rates retail discount that applies to pubs, restaurants and other small businesses.
Senior politicians from across the main British political parties have shown support for the campaign to make grassroots venues eligible for business rates rebates, but action has yet to be taken.
The 2017 revaluation of business rates – the tax levied on non-residential property in the UK – resulted in a 31% increase in business rates payable by grassroots venues. A UK Live Music Census showed that 33% of small music venues reported that the increases had an ‘extreme, strong or moderate’ impact on their existence.
“The chancellor missed a great opportunity with his Spring Statement to give some much-needed help to hard-pressed grassroots music venues”
“The chancellor missed a great opportunity with his Spring Statement to give some much-needed help to hard-pressed grassroots music venues,” comments Dugher, who says it is “ludicrous” to classify pubs and clubs as “not similar” to music venues.
“Our chance of developing future talent is put in jeopardy if performers cannot find a place to play, nurture their talent and grow their audience. Supporting grassroots venues must be a key part of the government’s industrial strategy for music,” adds Dugher, urging the chancellor to rethink his policy.
UK Music welcomes the chancellor’s announcement that a £700 million package will be rolled out from next month to help small and medium-sized enterprises invest in apprenticeships
The umbrella organisation also welcomes new investment in cities and city regions, following UK Music’s work with city region mayors to support the night-time economy across the UK.
Cross-party support for music venues rates relief
Senior politicians from across the main British political parties have shown support for a call by UK Music to make grassroots music venues eligible for business rates rebates, following a meeting with the chancellor of the exchequer, Philip Hammond.
Michael Dugher, chief executive of umbrella organisation UK Music, and Labour’s shadow culture minister Kevin Brennan met chancellor Hammond for urgent talks after some venues were hit by business rates rises of over 800%.
Brennan had raised the industry’s concerns regarding business rates to the chancellor in the House of Commons. At the meeting, Dugher presented a dossier outlining the impact of the 4% rise in business rates – the tax levied on non-residential property in the UK – on live music venues.
The rise has seen some venues, such as the Macbeth (300-cap.) in east London, experience a tax increase of £20,496 – a rate hike of 806%. The Music Venue Trust (MVT) warns that 35% of music venues have closed in a decade and the business rate hike could force many more to shut down within months without a government rethink.
The meeting concerned a call from music organisations to make music venues eligible for the retail discount on business rates, which applies to shops, restaurants and drinking establishments.
“In last year’s UK Live Music Census, 33% of small music venues reported that business rates increases had an ‘extreme, strong or moderate’ impact on their existence in the past 12 months,” says Brennan. “The chancellor must recognise the importance of these venues and extend the rates discount given to pubs to protect their future.”
“If the UK wants to retain its preeminent position as being a world leader in music, our industry needs the strategic support of government”
In December, Her Majesty’s Treasury announced that music venues would not be eligible for the rebate. Following the announcement, Dugher and MVT chief executive, Mark Davyd, co-wrote a letter to the chancellor describing government policy on rates as “discriminatory towards grassroots music venues.”
Dugher requested the chancellor add the 124 grassroots music venues within the qualifying value of between £12,001 and £50,999 to the retail discount scheme, reducing the venues’ business rate bills by one-third.
UK Music says this would be a lifeline for small venues and play a vital part in nurturing the talent pipeline vital to the chances of creating the next big British talent.
“I’m pleased that the chancellor listened to what we had to say about why we need a specific targeted change on business rates to safeguard the future of so many of our cherished grassroots venues,” comments Dugher.
“If the UK wants to retain its preeminent position as being a world leader in music, our industry needs the strategic support of government.”
Politicians including former culture minister and Conservative MP Ed Vaizey, Liberal Democrat digital, culture, media and sport spokesperson Baroness Jane Bonham-Carter and conservative MP Sir Greg Knight have lent their support to UK Music’s request.
No business rates relief for UK grassroots venues
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.”
UK Music calls for bringing forward of rates review
UK Music chief executive Michael Dugher has urged the chancellor of the exchequer to bring forward his planned review of business rates, saying many UK venues and recording studios are still “reeling” from last year’s rates increase and may not survive until 2021.
Delivering his spring statement yesterday, chancellor Philip Hammond announced that a planned revaluation of business rates – the tax levied on non-residential property in the UK – would be brought forward a year, to 2021. The change would be followed by revaluations every three years, with the next taking place in 2024.
Dugher (pictured) wrote to Hammond last November to ask for an urgent review of his plans to raise business rates by 4%, which the industry umbrella group says will disproportionately affect the music business and could leave many venues “fighting to survive”.
Responding to yesterday’s spring statement, Dugher welcomed plans bring forward the revaluation by one year, but says the move falls well short of a review “urgently needed to help thousands of businesses in the UK music industry”.
“Venues and studios need help now and can’t afford to wait until 2021”
“Many music venues and studios are still reeling from the huge hikes in business rates following last year’s revaluation,” he says. “Venues and studios need help now and can’t afford to wait until 2021.
“We need an urgent review of the disproportionate rates many venues and studios face if we are to maintain our vibrant and diverse music scene. The chancellor needs to press the fast-forward button and make that happen.
“It is plainly unfair, for example, that one small venue – the Lexington [200-cap.] in north London – has to endure a rise of 118% in its rateable value yet Arsenal FC’s 60,000-capacity Emirates Stadium nearby enjoyed a 7% cut in its rateable value.”
“We are in great danger of losing the bedrock that has enabled the UK to be one of the world’s great sources of forward-thinking music”
George Akins, owner of DHP Family, came out in support of Dugher’s call for an urgent review, commenting: “We welcome the fact that the government is looking more urgently at business rates for music venues. This is certainly an issue for many venues across the country but it is far from being the only issue. Rent increases, unhelpful bureaucracy and redevelopments are all hitting small venues especially in the capital.
“Fundamentally small venues showcasing grass roots, contemporary music should be seen as cultural venues – in the same way as concert halls and arts theatres – which are eligible for subsidies. We are in great danger of losing the bedrock that has enabled the UK to be one of the world’s great sources of forward-thinking music.”
Separately, Dugher welcomed a separate initiative by the chancellor to provide £80 million for small and medium businesses to recruit apprentices.
UK Music calls for review of “damaging” business rates
UK Music chief executive Michael Dugher has written to the chancellor of the exchequer, Philip Hammond, to ask for an urgent review of his plans to raise business rates, which the industry group says will disproportionately affect the music business and could leave many venues “fighting to survive”.
In the letter, Dugher warns that the planned 4% rise in business rates – the tax levied on non-residential property in the UK – coupled with the ‘revaluation’ announced in February, which has sent the rateable value of many music venues and recording studios to “catastrophic” and “woefully unjust” levels, risks harming Britain’s music business, “the jewel in the UK’s cultural crown”.
As evidence, Dugher attaches to the letter a table showing how the business rates revaluation, introduced in April, has sent taxes paid by both large and small venues skyrocketing: The O2, for instance, has seen its ‘rateable value’, which is used to calculate rates, increase 141%, while Manchester Arena’s has grown 80% and Leeds’ First Direct Arena 84%.
On the other end of the scale, the 200-capacity Lexington in London has seen an increase in 118%, with London’s 350-cap. Jazz Café (+73%) and 350-cap. 100 Club (+52%) and Norwich’s 260-cap. Arts Centre (+40%) hit similarly hard.
The chancellor should use his budget to make sure the venues and studios that gave artists like Adele, The Beatles and Oasis their big break are not put under threat because of soaring rate bills
“The Chancellor must rethink these changes, which are woefully unjust and could have a potentially catastrophic impact on some music venues and recording studios,” comments Dugher.
“The music industry contributes £4.4 billion to our economy, employs more than 142,000 people and generates exports of £2.5 billion.
“The chancellor should use his budget to make sure the venues and studios that gave artists like Adele, The Beatles and Oasis their big break are not put under threat because of soaring rate bills.
“Music is the jewel in the UK’s cultural crown. But we need to protect music venues are vital if we are continue to nurture the stars of tomorrow.
“The chancellor must think again and act before it is too late.”