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UK live sector frustrated by mini-budget

The UK’s live music industry has reacted with disappointment to chancellor Rishi Sunak’s spring statement, which was delivered today in the House of Commons.

Calls to extend the VAT break on live event tickets sales past the end of this month again went unheeded, with the temporary 12.5% rate now set to revert to 20% from 1 April. There were also no improvements announced to the government’s £800m insurance scheme for live events

Trade body LIVE (Live music Industry Venues and Entertainment) has appealed for the government to work with the industry to consider a cultural VAT rate of 5% on ticket sales.

“Live music is facing new and unprecedented challenges that threaten to wreck one of the UK’s cultural crown jewels – a 7.5% increase in VAT on tickets, wholesale cost increases and major ticket cancellations due to spiking covid cases,” says a spokesperson for the organisation. “At the same time, the last remaining help from government is being withdrawn.”

However, better news for the sector arrived in the form of the previously announced 50% discount on business rates, which was confirmed by the chancellor.

“While we welcome the business rates discount, we need further measures that can provide a cash injection to all areas of the sector, such as action on VAT,” adds the LIVE spokesperson. “We are calling on the chancellor to look again at these measures, which would help secure the sector’s recovery and allow our £4.5 billion industry to continue boosting the UK economy.”

Association of Independent Festivals (AIF) CEO Paul Reed suggests the mini-budget has done little or nothing to assist the recovery of the festival circuit.

“We are disappointed that the chancellor has not responded to our repeated calls to grant an extension to the 12.5% VAT rate on festival tickets beyond the end of March”

“We are disappointed that the chancellor has not responded to our repeated calls to grant an extension to the 12.5% VAT rate on festival tickets beyond the end of March,” he says. “Festival organisers are experiencing cost increases of between 20-30%, which is way beyond rapidly rising inflation, with extreme pressure along the entire supply chain. We urge the government to look at this again and maintain the reduced rate on VAT.

“We also ask the government to urgently reconsider the removal of tax incentives to use certain biofuels. These should be maintained at the current rate as a transitional measure to encourage use of greener fuels at festivals. To do otherwise is completely contrary to the government’s objectives of incentivising energy efficiency and reducing emissions.”

Despite giving the thumbs-up to the business rates discount for grassroots music venues, Music Venue Trust chief Mark Davyd is keen to highlight other concerns.

“With no action for businesses on energy bills, or NI liability, and the missed opportunity of action on VAT that would support the sector to recover from the Covid crisis, the outcome of the budget is that none of the extraordinary financial pressures being placed on venues have been mitigated or alleviated,” he says. “This budget has failed to respond to inflationary increases from rent, supplies, and services running in excess of 20% across the sector.

“We note that the government has recommitted itself to supporting business investment, especially research and development. We again ask that the secretary of state for culture should enter into meaningful discussions with the live music industry to create R&D tax incentives and direct financial support to achieve that outcome.”

The Night Time Industries Association (NTIA), meanwhile, went further still in its criticism, declaring itself “extremely disappointed”, warning the sector faces a “perfect storm” of challenges over the next 12 months, particularly in light of the cost of living crisis.

“We called on the chancellor before the spring statement to produce a package that included an extension of VAT and business rates reliefs, a cancellation of the proposed NI hike, and action on businesses energy bills and fuel duty, to allow the sector financial headroom to survive in something resembling its pre-pandemic form,” says NTIA chief Michael Kill. “It is very disappointing that today he took none of these steps.”

 


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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.

 


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