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At least 60 Dutch festivals cancelled in 2024

At least 60 Dutch festivals have been cancelled this year, according to national press.

This figure marks a record number of festival cancellations – excluding the Covid pandemic years – writes AD. In addition, only 30 new festivals have been introduced.

In the last week, the UB40-headlined Chillville in Breda was cancelled at the last minute due to “a major shortage of event materials and personnel” and Mañana Mañana in Gelderland, promoted by Superstruct-backed Feestfabriek (Party Factory), announced that it would not return after its 10th edition as “ticket sales are not enough to make the event profitable”.

In addition to rising costs and a shortage of resources, many organisers are grappling with changing municipal and national policies.

Psy-Fi Festival in Oldenzaal suddenly had to pull the plug because the municipality “made a complete change in the zoning plan,” causing the festival to run into serious time constraints.

The BouleVaart festival in Krommenie also had to deal with stricter regulations; in addition to an event permit, an environmental permit and acoustic research were suddenly required. “Everything has made organising more difficult, I don’t think we will ever do it again,” said the organiser.

In addition to rising costs and a shortage of resources, organisers are grappling with changing municipal and national policies

Meanwhile, Amsterdam festival organisers fear that the city’s new permit policy, set to be trialled next year, could lead to bankruptcies.

Set to come into effect in 2026, the new policy aims to give new and smaller events a better chance of getting scarce festival locations in order to “better meet the needs of all Amsterdam residents”.

Events councillor Touria Meliani wants to set up a committee that will determine who gets a place based on substantive criteria. By the end of this year, events would know whether they have a place on next year’s calendar.

Festivals including DGTL, Amsterdam Open Air, De Zon, Loveland and Zeezout have hit back, saying the approach is “too late” and “unworkable” for both new and established festivals.

“You cannot organise a safe and successful festival in six months,” the organisers wrote in a full-page advertisement addressed to the municipality and published in Het Parool last month.

The organisers have launched a petition against the new policy, which has been signed by 18,613 people at the time of writing.

Another major issue on the horizon is the government’s plans to raise the tax rate for the cultural and creative sector from 9% to 21%, which has also prompted a coalition of organisations to launch a joint campaign asking it to reconsider.

“The festival offering is always changing. The audience too. Taste changes, people enter a different phase of their lives”

A statement from the coalition reads: “The proposed increase in the VAT rate will inevitably lead to higher prices, which will put pressure on the accessibility and affordability of sports, media, books, culture and catering for the public. It affects everyone in the Netherlands in daily life and in several areas. It is an additional burden on the valuable free time, club life, curiosity and (mental) health of every Dutch person.”

Despite a raft of major challenges facing the Dutch live music industry, Berend Schans of the Association of Dutch Music Venues and Festivals (VNPF) says there’s no immediate need to panic.

“The festival offering is always changing. The audience too. Taste changes, people enter a different phase of their lives.”

Schans also points to festivals and concerts that sold out very quickly despite the higher prices, such as Lowlands (€325 for a weekend ticket) and AC/DC (€170 for a standing room).

The Dutch festival market isn’t the only one that’s been hit by a high number of festival cancellations. The UK has seen over 40 festivals shut down, while Australia’s festival scene declared a crisis earlier this year.

 


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Dutch groups hit out at live music VAT rate hike

The Association of Dutch Music Venues and Festivals’ (VNPF) is calling on the government to reconsider its plans to raise the VAT rate for concert and festival tickets by 12 percentage points.

The increase from 9% to 21%, which is set to come into effect from 2026, was announced this week in the new coalition agreement between the PVV, VVD, NSC and BBB parties.

But the national live music trade body is warning the move could have dire consequences for the domestic business, and is appealing for talks with the powers that be.

“This measure makes ticket sales uncertain, leading to less investment in a sector that has already been hit disproportionately hard in recent years,” it says. “The jobs of more than 100,000 people working in this industry are also threatened.

“In addition, this VAT increase weakens the competitive position of the Dutch live music sector compared to neighbouring countries where low rates are still charged. Stages and festivals lose their offer to neighbouring countries, with all the financial consequences that entails. This policy puts the Dutch world-leading live sector at a great disadvantage.”

Stressing that a healthy cultural sector is “essential” for the country’s economy, the VNPF says the impact on the tax hike would be felt on and off the stage.

“The consequences extend beyond just the visitors – up-and-coming pop talent will find it even more difficult to break through and generate a sustainable income”

“Pop culture in the Netherlands is becoming less accessible, causing a broad audience to be excluded from cultural events,” it continues. “This makes the Netherlands less attractive for international artists, which has a negative impact on the business climate in this industry.

“The consequences extend beyond just the visitors – up-and-coming pop talent will find it even more difficult to break through and generate a sustainable income.”

The Association of Event Makers (VVEM) has also shared its “major concerns” at the proposal.

“This increase is bad news for consumers,” says the group. “A decision like this also has far-reaching consequences for Dutch artists, who see the gap with their audience growing, but also for entrepreneurs in the events industry.”

A four-party coalition deal was provisionally struck this week to form a right-wing government, almost six months after PVV leader Geert Wilders won the Dutch election.

“The VVEM suspects that the new government has not realised that a measure like this will hit ordinary Dutch people who like to go to events hard,” it adds. “The flywheel effect is that the business climate in the industry is also hit hard. We would like to enter into discussions with a new government to convince them not to take this measure.”

 


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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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Finnish biz slams proposed VAT increase on tickets

Finland’s live music associations are sounding the alarm over a proposed increase in VAT on concert tickets.

Under the government’s new budget proposal, value-added tax on tickets for cultural and sports events will rise from 10% to 14% from 1 January 2025.

Trade bodies have called the hike “unreasonable” and have warned that the proposal should not be implemented under any circumstances.

Jenna Lahtinen, executive director of the live music benefit organisation LiveFIN, points out that the industry is still recovering from the losses sustained during the Covid-19 pandemic.

“Festivals, concert venues and the entire event industry have just completed their first full year of operation,” she says. “The industry does not need any decisions that weaken growth and profitability right now. An increase in the VAT on entrance tickets would be a hard blow to the industry.”

“The festival sector simply cannot stand it”

Laura Haarala, executive director of the Association of Finnish Program Agencies and Agents, adds: “The increase in the costs of the events industry has been very strong since the coronavirus. Costs have risen considerably higher than the general level of inflation. This has already affected the profitability of the companies in the industry, despite moderate ticket price increases. The increase in value added tax will increase the pressure on price increases or weaken the profitability of program sales.”

Sami Kerman, CEO of the Event Industry Association, says the proposed increase will “inevitably affect demand for events”.

“When Finland is already in recession and the uncertain situation of companies is reflected in the cyclically sensitive event industry, especially corporate events, it would be especially important to take care of the demand for consumer events,” says Kerman. “If we are going to stick to the VAT increase, decisions are needed to stimulate demand accordingly.”

While Kai Amberla, executive director of Finland Festivals, has warned that the festival sector industry “simply cannot stand” the hike.

“The Corona era showed how important festivals and other cultural events are for people,” says Amerblia. “After the pandemic, the economy of art and culture festivals has been faced with huge challenges, but with strict financial management and very moderate ticket price increases, we have been able to get back on the path to growth. It is completely irresponsible that at the same time cultural policy subsidies are being cut with a heavy hand, there is a proposed to increase the value added tax on admission tickets.”

The associations are hoping the government will revoke the decision in the framework rush of spring 2024.

 


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UK businesses face closure over energy crisis

Grassroots music venues are among the small and medium-sized businesses in the UK that are facing closure without immediate action to curb rocketing fuel bills.

With businesses excluded from the energy cap, some venues are seeing their energy bills increase by an average of 300% –in some cases as much as 740% – adding tens of thousands of pounds to their running costs.

Based on a survey of its 941 venue members, Music Venue Trust (MVT) revealed that venues face an average 316% rise in fuel bills, taking the average cost to £5,179 per month per venue, up from the current average of £1,245.

One venue has been quoted £42,000 a year for fuel – more than treble its previous bill of £13,200 – with the supplier saying they will only accept full payment in advance.

MVT is now warning that the surge in energy bills means that around 30% of the entire network of venues face the threat of permanent closure.

Around 30% of MVT’s entire network of venues face the threat of permanent closure

Pubs are also seeing energy costs soar by as much as 300%, with brewery bosses telling the BBC that the crisis would cause “real and serious irreversible” damage to the industry without support.

Both the hospitality and entertainment sectors are now urging the government to introduce a cap on the price of energy for businesses. The live music sector is also calling for VAT to be decreased from the current 20% to 12.5% and for business rates relief to be extended.

“Alongside the simply unaffordable increases to costs, the government must urgently address the fact that the market for energy supply has collapsed,” says Music Venue Trust CEO Mark Davyd.

“We have multiple examples where venues do not have any option other than to accept whatever price increases and tariffs are proposed by the sole supplier prepared to offer them power at all. The situation has rapidly deteriorated into a monopoly.”

“The new prime minister must ensure that music businesses are included in the support measures”

UK Music chief executive Jamie Njoku-Goodwin adds: “Spiralling energy costs have created an existential threat for venues and music studios. It’s urgent that government takes action to support businesses with the costs they are facing.

“We all saw just how miserable life was without live music during the pandemic, when venues were closed for months – the high cost of energy bills could now close them forever.

“The new prime minister must ensure that music businesses are included in the support measures that are brought forward to deal with soaring energy costs.

“The government should look at cutting VAT and extending business rate support to help music businesses that are fighting for their survival.”

Last week, IQ heard from a number of European arenas who also say that skyrocketing energy costs are emerging as the sector’s biggest challenge since the Covid-19 pandemic.

ASM Global’s Marie Lindqvist said the prices for electricity and gas at the company’s venues have quadrupled since the beginning of the year, with the UK being hit the hardest. Read the full story here.

 


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LIVE CEO Jon Collins sets out key priorities

Jon Collins, the recently appointed CEO of live music industry umbrella group LIVE, has spoken to IQ about the organisation’s key priorities going forward.

Collins was appointed following a 25-year career running representative organisations in the hospitality industry. His most recent role was as chairman of the Institute of Licensing and the National Licensing Forum. He has also held roles including lead author for the Greater London Authority’s (GLA) Night Time Commission for London and as a senior adviser to UK Hospitality, where Collins focused specifically on late night and music licensing issues.

According to Collins, there is “no shortage” of issues facing the sector but in this first instalment of a two-part interview, he focuses on four of the most pressing matters.

VAT reduction, government engagement, post-Brexit touring and the cost of living crisis are top of the CEO’s agenda and, here, he sets out his plan of action to tackle each item.

VAT
“I think a cultural VAT rate of 5% on ticket sales would send a great signal about the government’s attitude to culture and live music within the UK, recognising its role as a driver of tourism, both domestic and international. It would actually boost the government’s Levelling Up agenda too because live music sits right across the country.

“Plus, it would be an economic generator that would make more venues viable and gigs more affordable. It’s going to put more money back in to allow us to keep more money in the industry, which allows us to pay artists better, pay students better, pay bar staff better. And we know that thriving live music venues act as a hub for culture-led regeneration in an area, all sorts of neighbourhoods up and down the country where they’re either defined by an existing music venue or they can be transformed when a venue moves in.

“There are cultural rates in a couple of dozen other countries, which are probably somewhere between 5 and 10%, so we think there’s established precedent elsewhere to say this is a good idea. We need to do another piece of economic research to show that if they cut VAT, the cost will be offset via reduced tax revenue. If you keep venues open and they put on more gigs, you’re getting 5% of a bigger cake than you would have had from the current 20% VAT rate.

“Then there are the other multiplier factors that would benefit the economy but we don’t have those numbers to hand yet, so we need to build that case. If we can get if we can win the arguments with the Treasury, then we might be close to getting the political decision-makers to press the button on it. I would love to think we’re close on this one but my guess would be that it’s a two-year campaign.”

“I think a cultural VAT rate of 5% would send a great signal about the government’s attitude to culture and live music”

Cost of living crisis
“It’s not in any industry’s gift to put more money into the consumer’s pocket, so the first thing we can do add pressure on the government to say they need to take steps to support households so that they do have disposable income and can visit their local gig venues. That money will then go back into the local economy and is a good investment to make. And then you can look at what the government could do to give operators and promoters and festival organisers more leeway to make cheaper tickets available. That brings you back to VAT and also business rates, which is such an outmoded, old fashioned system that just doesn’t work anymore and certainly doesn’t address the balance between the clicks and bricks economies.

“In New York, if a theatre doesn’t have an event on, they don’t pay rates on the auditorium. They only pay rates on the office space that is actually being used or maybe the kiosk on the curbside here. We don’t have that flexibility. So we think now would be a really a sensible idea – if there’s nothing going on in the theatre or a good venue or an arena then give them a break. Otherwise, you end up just constantly trying to make the space being used, which can mean you don’t have the time to actually do any refurbishments in the venue.”

“I want to have half a dozen figures that I can use to say, ‘This is why it’s in your interest to support live music'”

Government
“With LIVE’s multi-year funding and its expanding member base, we’ve definitely sent a message to government that it should take this sector seriously. The thing with policymakers is they change every five minutes. I think the average lifespan of a minister in a role is about 18 months. So you send the message, but you have to keep sending it and refining it and amplifying it.

“Greg [Parmley, former LIVE CEO] worked with Chris [Carey, LIVE chief economist] to produce a robust report very quickly that said this industry has a £4.5 billion GVA and employs 210,000 people. They are take-me-seriously numbers at a time when most people felt our industry wasn’t being taken seriously. If we’re very honest, we probably still feel we’re not taken seriously enough and so that’s another challenge for me is to make sure that government is unable to underestimate us. We will be taking every opportunity we can to put those numbers forward, talk about the industry, how many people we employ, the regeneration that happens, the tourism etc. So we’re talking with multiple partners at the moment to try and pull all of these facts and figures together. I want to have about half a dozen figures that I can use to say, ‘This is why you have to support this sector – this is why it’s in your interest to support live music’.”

“A cultural exemption would just remove all of these [post-Brexit touring] issues”

Brexit
“The LIVE touring group, brilliantly chaired by Craig Stanley, has done a tremendous job of trying to negotiate through government and then the EU for those post-Brexit touring challenges. But there is more to do because there’s not a stable framework.

“We’ve got the dual registration, which works for the larger specialist hauliers for this summer. We think we’re going to get a statutory instrument, probably when parliament comes back after the summer, around September, that will formalise that. Then there has also been progress on splitter vans, ferries and the Eurotunnel.

“But we know none of this solves the issue for a swathe of hauliers in the squeezed middle as we’re viewing them now. There is no obvious solution [for the squeezed middle]. There may be ways that they could find to step into that dual licensing regime, but that’s not cheap and not straightforward. The dual registration also doesn’t help own-account operators, which is the vast majority of British orchestras because of the particular needs of the classical music sector. So we continue to put the pressure on there.

“One of the things that LIVE was able to achieve just before I joined was to get a seat on the domestic advisory group of the trade and cooperation agreement between the UK and the EU. It’s basically the group that advises the UK government as it looks to shape its relationship with the EU going forward. We want to talk about the bigger ask of cultural exemption for artists and the technic technical teams and kit. I think it’d be almost impossible to get that before 2024 which is when the trade and cooperation agreement is next to be negotiated. So, we’ve probably got a couple of years of trying to make wins in a piece-by-piece way, while having that overarching target of the cultural exemption because that would just remove all of these issues.”

 


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UK: 90,000 cultural jobs lost due to pandemic

Around 86,000 jobs in the UK’s cultural nighttime economy sector have been lost due to the Covid-19 pandemic, according to a new report.

The Night Time Industries Association (NTIA), which commissioned the report, says it has found that the sector has been “ravaged” by the pandemic.

The report shows for the first time the value of the UK’s nighttime cultural economy, which was 1.6% of GDP – or £36.4 billion – in 2019. This contribution accounted for 425,000 jobs across the UK.

The NTIA says there are fears that many of the jobs lost to the pandemic in the nighttime economy sector will be lost for good, with businesses closing and persistently lower demand for services.

The association has warned that it is “the worst possible time to introduce vaccine passports, which will further damage a sector essential to the economic recovery”.

“We are calling for [the chancellor] to extend the 12.5% rate of VAT on hospitality until 2024, including door sales”

“[This report is] timely because at this moment, governments in Scotland and Wales are pressing ahead with chaotic vaccine passport plans, and the UK government refuses to rule out their use in England,” says Michael Kill, CEO at NTIA.

“It is crucial the chancellor uses the upcoming Budget to support this beleaguered sector. We are calling for him to extend the 12.5% rate of VAT on hospitality until 2024, include door sales in that reduced rate of VAT, because the present system punishes nightclubs that rely on door sales rather than selling tickets, and for him to ensure there are no increases in alcohol duties – our sector really cannot afford any additional burdens.”

The last Budget took place on 3 March 2021 and included an extra £300 million for the Culture Recovery Fund (CRF), ‘restart grants’ for hospitality/leisure businesses, the extension of the coronavirus job retention scheme (furlough) and self-employed income support (SEISS) schemes, and business rate relief.

The budget also confirmed an extension of the 5% rate of VAT on ticket sales for a further six months, with an interim rate of 12.5% until April 2022.

 


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UK live industry cautiously welcomes 2021 budget

The UK’s live music industry has welcomed many of the provisions contained in the 2021 government budget, presented this afternoon by chancellor of the exchequer Rishi Sunak, but expressed its disappointment at the continued lack of a European-style insurance scheme for festival organisers.

Among the measures unveiled by Sunak in the Commons today (3 March) are an extra £300 million for the Culture Recovery Fund (CRF), ‘restart grants’ for hospitality/leisure businesses, the extension of the coronavirus job retention scheme (furlough) and self-employed income support (SEISS) schemes, and business rate relief.

The budget also confirmed an extension of the 5% rate of VAT on ticket sales – a key campaign focus for pan-industry group LIVE (Live music Industry Venues and Entertainment) and the whole UK concert industry – for a further six months, with an interim rate of 12.5% until April 2022.

Paul Reed, CEO of the Association of Independent Festivals, says: “We warmly welcome the extension to the reduced VAT rate on tickets, which will really help festivals during the 2021 sales cycle. For many AIF members, this is the first period in which they are selling tickets since the outset of the pandemic. We do, however, reiterate the recommendation of the DCMS select committee for VAT on ticket sales to remain at a reduced rate for three years so that the UK festival sector can fully recover.

“The Culture Recovery Fund has been a lifeline for many of our members so it’s greatly encouraging to see a further £300m invested into this, though we would appreciate some further detail on this additional round and the time period it will cover.

“Independent festival organisers would much rather mobilise their staff to plan a full and successful festival season this summer”

“We also welcome the extension to the government’s furlough scheme and continued support for the self-employed. However, independent festival organisers would much rather mobilise their staff to plan a full and successful festival season this summer. As we have repeatedly stressed, the only way they can do this is with a government-backed insurance scheme that covers Covid-19-related cancellation. The chancellor today confirmed the extension of the government backed restart scheme for film and TV productions – a similar safety net needs to be put in place before the end of March to avoid mass cancellations throughout the UK’s festival market.”

Lucy Noble, chair of the National Arenas Association, comments: “For the live music industry, today’s budget, and specifically the extension of furlough to September, is enormously welcome. The whole sector has been grateful for a 21 June ‘not before’ date for operating at full capacity, and the extension of the 5% VAT rate on tickets is something we had been hoping to see.

“Uncertainty remains, and the lack of insurance for Covid-related cancellation is a huge concern – what the entire live sector wants is to be allowed to trade safely out of this situation and once more welcome people to come together for extraordinary shared experiences.”

“Music Venue Trust welcomes the extensions to furlough, SEISS and the VAT cut on ticket sales,” says MVT CEO Mark Davyd. These measures are supportive of the next steps in the campaign to reopen every venue safely. On business rates, we note that the Chancellor has provided a 100% cut for the initial three-month period in which venues will not be trading. This period does not resolve the long running debate on business rates, and we look forward to a full discussion of this outdated and anachronistic taxation in the business rates review in Autumn 2021.

“The chancellor announced additional funding to be distributed by Arts Council England [ACE], but the purpose of this funding is unclear; we hope to work with ACE and DCMS to ensure it is effectively distributed, and includes sensible and structured capital investment that enables our music venues to become more Covid-secure.”

“The needs of those in mixed employment, and those individuals operating as limited companies, were not met”

Annabella Coldrick, chief executive of Music Managers Forum, says: “The MMF welcomes the extension of eligibility for support to the self-employed. This is a really important measure that should have an impact on our community and their clients, many of whom faced real hardship during the pandemic, although unfortunately directors of limited companies are still excluded. We also welcome the £300m Cultural Recovery Fund for reopening, although it was disappointing not to hear any developments on government-backed insurance for live music events which is urgently needed to get us back up and running in July.

For a full longer-term music recovery, to a place where artists can perform to full capacity crowds and tour internationally, we will need this kind of targeted and continued support reaching into 2022.”

“We welcome the continuation of support for employers and self-employed workers, as well as the addition of those newly self employed sole traders; this is tempered by the disappointment that the needs of those in mixed employment and those individuals operating as limited companies were not met,” adds Dave Keighley, chair of the Production Services Association.

“Support for companies is also broadly welcomed, although doubt over whether business rate relief applies to our members that support hospitality and leisure remains. Any discounts given to venues should be clearly extended to those companies that work in those venues, recognising that live events are an ecosystem that needs complete support. Although the extension of the 5% VAT rate helps, it needs to be extended to assist our sector’s recovery.

“The extension to the Culture Recovery Fund is encouraging, we hope that the current and subsequent rounds will support event more of our member companies that support cultural activity.”

 


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Keep VAT at 5%, pleads UK live sector

Leading UK live entertainment industry organisations and associations have written to the chancellor of the exchequer urging him to maintain the temporary 5% rate of value-added tax on ticket sales.

While lower rate of VAT was brought in last year, the business has yet to feel the benefit due to its near-total closure since March 2020. In the letter, addressed to Rishi Sunak, the signatories say that if the government raises VAT back to 20% in the March budget, the policy will have been pointless and will pull millions of pounds’ worth of support when the industry most needs it.

“The whole sector has been brought to its knees by the pandemic,” says Lucy Noble, chair of the National Arenas Association (NAA). “Increasing VAT on tickets by 300% at this time could be the final nail in the coffin for many in the music industry. And at precisely the moment when people urgently need the joy of music in their lives.”

The Department of Digital, Culture, Media and Sport (DCMS) select committee recommended a three-year extension to the 5% VAT policy in their Impacts of COVID-19 on DCMS Sectors inquiry in July last year. The committee’s chair, Julian Knight MP, says: “Pulling the plug on the reduced VAT rate for ticket sales now would be short-sighted. The DCMS Committee recommended in its July 2020 report that the 5% VAT rate should be kept for three years.

“With live events still unable to operate, this is needed more than ever. I fully support LIVE [Live music Industry, Venues & Entertainment]’s campaign. Now is the time to extend support for our vibrant creative sector, which could be a cornerstone of our economic recovery from this crisis.”

“Increasing VAT on tickets by 300% at this time could be the final nail in the coffin for many in the music industry”

In addition to the NAA and umbrella organisation LIVE, signatories to the letter include the Concert Promoters Association, Music Managers Forum, Music Venue Trust, UK Theatre, the Association of Independent Festivals, the Entertainment Agents Association and the Musicians’ Union.

Julian Bird, chief executive of UK Theatre and SOLT (Society of London Theatre), comments: ‘The theatre industry, alongside others in the performing arts and live events sector, was first into lockdown last March, and will almost definitely be one of the last out. With a usual annual audience of over 34m, generating around £1bn for the Treasury every year, the UK’s theatres contribute hugely to the economic and cultural life of this country, and will be key for local recovery.

“It is vital that the government helps ensure the industry’s survival by continuing the reduced VAT rates.’

Prior to the outbreak of the pandemic, the UK’s creative industries were growing at five times the rate of the wider economy, generating £11.25 billion in gross value added each year and supporting over 600,000 jobs. Without urgent and targeted government intervention, the companies, producers, performers and infrastructure that support these industry’s complex ecosystem will not be able to recover once the pandemic is over, warns LIVE.

 


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VAT cut ‘could save Hungarian live sector’

The Hungarian live music business is calling on the government to support the industry by slashing the sky-high VAT levied on concert and festival tickets.

Currently, value-added tax is charged at 27% on concert and 18% on festival tickets in Hungary. According to a new report by PricewaterhouseCoopers (PwC), the Hungarian government could give the industry – whose revenues are 10% what they were in 2019 – a shot in the arm, and make it more “crisis resistant” in future, by cutting VAT to a uniform 5%.

The report – funded by Music Hungary, Sziget festival, promoter InConcert, the Hungarian Festival Association (Magyar Fesztivál Szövetség) and the Association of Music Managers (Zenei Managerek Szövetsége), among others – was presented at Music Hungary’s annual conference, held on 9 and 10 November, days before Hungary went into a second lockdown.

In 2019, the Hungarian live industry was worth an estimated 45 billion Ft (€125 million) by net ticket sales. PwC’s analysis shows that a reduction in VAT to to 5% would provide the Hungarian music industry with an additional 6.7bn Ft annually, the tax cut more than paying for itself by stimulating increased ticket sales.

“A reduction in the VAT rate would have a positive impact on all players in the sector”

According to Dávid Szilágyi, chief analyst of PwC Hungary, the current rate of VAT also makes it difficult for promoters to afford foreign performers.

According to Music Hungary, the Hungarian music industry has received next to no aid throughout the coronavirus crisis, with just €23.5 million finding its way to the sector since March. Of that, €14m went to poorly received government-sponsored ‘warehouse concerts’ (raktár koncertek) held behind closed doors since August.

“Our research highlights the economic and cultural significance of concerts and festivals, and also emphasises that a reduction in the VAT rate would have a positive impact on all players in the sector,” concludes the PwC report.

In October, IQ partnered with Hungarian Oncoming Tunes (Hots), the Hungarian music export office, to showcase the best of Hungary’s resilient live music scene.

 


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