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.”
Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.
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.