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Live industry reacts to no-deal Brexit touring advice

Several UK live industry figures have described as inadequate new guidance from the Department for Digital, Culture, Media and Sport (DCMS) on touring after a no-deal Brexit, amid growing concern within the business over the viability of future tours.

Two DCMS guides – one for movement of people and the other for objects, animals and equipment – highlight key questions and actions to consider before embarking on tour.

The guidance advises touring artists and their teams to check immigration regulations for each EU country, ensure they have appropriate insurance and obtain a ‘green card’, GB sticker and, in some cases, an international driving permit, for vehicles and drivers.

A £326 ATA carnet is recommended to avoid paying duty on equipment and other goods. For those wanting to sell merchandise, DCMS advises applying for an EORI number “as soon as possible”, as failing to do so may incur “increased costs and delays”.

“It’s not very clear, is it?”, Paradigm agent Rob Challice says of the new no-deal Brexit guidance. “It hardly conveys that the government is in a state of readiness for no deal.

“What we do know,” continues Challice, “is that advice is going to change over the next four weeks and some of it will not be clear before 1 November.”

Music industry tax specialist and Hardwick and Morris partner Kevin Offer, who believes “some form of agreement covering touring” post-Brexit is needed, agrees that not much “detail” has been given in the new guide.

“The guidance hardly conveys that the government is in a state of readiness for no deal”

“Emphasis [is] placed on ‘check with the country you’re visiting’, although the EU is one customs area so the procedures should be the same,” Offer tells IQ.

For Offer, the subject of merchandise is not given enough attention in the new guides. “My understanding is that there is a possibility of paying import duty and (possibly) VAT at the point when merchandise to be sold at gigs enters the first EU country,” says Offer.

“I think that is going to be one of the main considerations on cash flow and budgets when planning tours.”

In August, industry professionals raised the alarm over regulations that would see musicians pay import duty and VAT on all merchandise in advance of touring in the case of a no-deal Brexit, with many pointing out that merchandising is “essential” for grassroots musicians in particular.

Paul Reed, CEO of the Association of Independent Festivals (AIF), says the DCMS guidance, while useful, “does not translate into readiness”. He tells the Guardian he does not feel the live music industry was ready for a no-deal Brexit, citing issues including VAT, data protection and the movement of people and equipment. “Despite repeated calls for an EU-wide ‘touring passport’ in the event of no deal, all we have are short-term assurances regarding freedom of movement up to December 2020 – and then ‘leave to remain’ for a further 36 months.”

“A no-deal Brexit could effectively mark the death knell for touring for the majority of low-earning touring musicians”

The guidance follows calls from industry figures, including UK Music boss Michael Dugher, for more clarification on what to expect if Britain leaves the European Union without a deal.

Dugher had warned that the “worryingly inadequate” information previously available was preventing the industry for preparing for what lay ahead.

“A no-deal Brexit could effectively mark the death knell for touring for the majority of low-earning touring musicians who are immensely talented and add tremendous economic value to the country,” Dugher tells IQ.

“In addition to the additional cost and red tape potentially associated with a no-deal Brexit, anyone bringing goods into or taking goods out of the UK in baggage or a small vehicle, which they intend to use for business, will be forced to declare the goods and pay import duty and VAT before moving them across the border.

“Britain is a global leader in music. The live music sector alone contributes £1 billion to the economy and it is the jewel in the crown. Why would the government want to kill this golden goose?”

 


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UK Music: touring may be “unviable” for many in no-deal Brexit

UK Music CEO Michael Dugher has highlighted “growing concerns” around the potential impact of a no-deal Brexit on the live music industry, in a recent letter to the home secretary.

Dugher states that the “viability of future tours” would be threatened if Britain were to exit the European Union without a deal.

The introduction of pre-paid income duty and value added tax on all merchandise brought on tour in the EU, as well as charges for moving equipment across borders, could result in an income loss of around 40% for touring acts, says Dugher.

The UK Music boss also calls for more clarification on what to expect in relation to freedom of movement post Brexit, stating the “worryingly inadequate” information currently available is preventing the industry from preparing for the possible changes ahead.

UK agents and promoters would find themselves under “considerable strain” if freedom of movement ended.

“Agents who have more EU acts on their books will see most impact,” writes Dugher, with some agents, promoters and festivals “who deal exclusively with EU artists” being “dragged into the immigration system for the first time.”

“[Immediate end to freedom of movement] would cause considerable disruption to the international live music touring industry”

The immediate end to freedom of movement “would cause considerable disruption to the international live music touring industry, in terms of UK artists travelling to the EU for concerts and vice versa,” says Dugher.

Dugher also states such a policy would “run contrary” to existing guidance which indicates there would be a three-month window in which EU citizens would be able to enter the UK to work.

“If an alternative ‘cliff edge’ policy is pursued,” continues Dugher, “it could result in retaliation from EU member states, requiring UK musicians to apply for expensive and bureaucratic visas and work permits in order to continue to tour the EU.”

UK Music and other industry associations, including the Musicians’ Union, have repeatedly pushed for a ‘touring passport’ which would allow musicians and their crews to move freely post-Brexit.

The UK’s Incorporated Society of Musicians recently called on the government to cover the additional costs incurred by musicians in the event of a no-deal Brexit.

 


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Proposed Brexit merch tax will ‘harm grassroots sector’

UK artists travelling to Europe will have to pre-pay import duty and value-added tax (VAT) on all merchandise they bring on tour with them in the event of a no-deal Brexit, according to new UK government guidelines.

European artists entering the UK would similarly have to pay taxes in advance for any merchandise they planned to sell while touring.

Under the regulations, artists would have to complete a long administrative process before embarking on tour with merchandise.

“If you bring goods into or take goods out of the UK in your baggage or a small motor vehicle, and you intend to use them for business, you must declare your goods and pay import duty and VAT before you move them across the border,” reads newly updated government no-deal guidance.

Industry professionals have raised concerns over the impact that such regulations would have on grassroots musicians.

According to Kelly Wood of the Musicians’ Union, the changes represent a “significant problem for touring musicians”.

“It’s a fundamental lack of understanding of the economics of grassroots touring”

“Merchandising  is essential for artists, as it can help to balance the books on tours with tight profit margins,” Wood tells IQ. “It’s also an essential ongoing part of an artist’s branding, which can help to grow a fan base and launch and sustain a career.”

Merchandise sales have boomed in recent years, with music merch sales worth nearly US$3.5 billion in 2018.

Merchandise is especially important for the grassroots sector, accounting for an estimated 30–40% of income generated by emerging artists touring in Europe.

“It’s a fundamental lack of understanding of the economics of grassroots touring to imagine that this process is remotely deliverable by new and emerging artists, either practically or economically,” says Mark Davyd of Music Venue Trust (MVT).

“One t-shirt sale is equivalent to 5,000 streams on Spotify, and band merchandise is the most direct way of supporting new and emerging artists,” says Davyd, adding: “We strongly urge the government to think again.”

“Artists are already having to piece together complex travel arrangements, itineraries, contracts and budgets”

The new regulations requires artists to apply for an EORI number, calculate the correct tariff, weigh goods, work out the value of the merchandise and decide on how to declare the goods to customs officials.

“The level of administration that these changes involve will prove problematic to artists who are already having to piece together complex travel arrangements, itineraries, contracts and budgets,” explains Wood.

The taxes on merchandise are not the only additional fees predicted to negatively affect musicians in the case of a no-deal Brexit. The UK’s Incorporated Society of Musicians has calculated that artists will face extra costs of up to £1,000 per year for customs documents, visas, medical insurance and more.

Industry associations, including UK Music and the Musicians’ Union, have repeatedly pushed for a ‘touring passport’ which would allow musicians and their crews to move freely post-Brexit.

 


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