Chancellor is being urged to abandon a
massive VAT hike on concert and live event tickets that is due to
kick in on April 1.
The warning comes ahead of the Chancellor’s Spring Statement on
March 23 when he will outline a mini-Budget.
UK Music Chief Executive has written to the
Chancellor to highlight the “hugely damaging” impact that a
planned Treasury hike in the VAT rate on gig tickets could have
on millions of music fans and the music industry. (See attached
letter andhere.)
At present, VAT is charged at 12.5% on tickets for live events.
However, the Chancellor is planning to hike the VAT rate to 20%
on April 1 in a move that promoters and music industry chiefs are
concerned could force a rise in ticket prices.
Music industry leaders are now calling on the Chancellor to
abandon the VAT rise to give the UK music industry and millions
of music fans across the country a break just as live music
returns after an absence of almost two years due to the COVID-19
pandemic.
The call on the Chancellor to ditch the VAT hike is part of a
six-point plan for the music industry outlined in UK Music Chief
Executive Jamie Njoku-Goodwin’s letter to .
Other measures include extending the current 50% discount on
business rates on music venues, and more funding to help British
performers touring the EU to navigate extra costs and post-Brexit
red tape.
UK Music is calling for a Music Export Office to help boost sales
of British music abroad, which dropped 23% from £2.9 billion in
2019 to £2.3 billion in 2020 due to COVID-19.
The collective voice of the music industry also wants music to
benefit from the same type of tax breaks as UK film, TV and video
firms enjoy, to help attract inward investment and nurture new
talent.
UK Music is also seeking more help for the self-employed, who
make up more than two-thirds of the UK music industry.
UK Music Chief Executive said:
“The planned hike in VAT could not come at a worse time for
millions of music fans and the live music industry, which was
shut down for almost two years due to the pandemic.
“We saw during those grim periods of lockdown just how important
music was to people’s mental health and how it helped us get
through some really tough times.
“Pushing up VAT to 20% would be hugely damaging for the music
industry and leave music fans facing a cost of gigging crisis.
The rise would come at a time when we are rebuilding
post-COVID-19, with hundreds of concerts planned over the next
few months.
“We would urge the Chancellor to give people who already face
rising prices and grim headlines every day a little lift by
ditching the ticket tax and abandoning the VAT hike.
“Dumping the planned VAT hike would help keep ticket prices down
for fans and help music businesses pay down debts they built up
during the pandemic, generate thousands of new jobs and nurture
new talent.
“It would help the music industry continue to recover and rebuild
after the COVID-19 pandemic, which wiped out around one in three
jobs in our sector.”
Pre-pandemic, the UK music industry contributed £5.8 billion to
the UK economy and supported almost 200,000 jobs, according to
the latest figures from UK Music.
However, the total number of UK music industry jobs plunged by
35% from 197,000 in 2019 to 128,000 in 2020 due to the
pandemic-enforced shutdown of live music.
It meant hundreds of festivals and live music events - including
Glastonbury - were cancelled after the first in a series of
lockdowns was imposed in March 2020.
The UK already has one of the highest rates of tax for
hospitality in Europe. In France and Spain, the VAT rate is set
at only 10%. It is just 7% in Germany and 6% in Belgium.
ENDS
Notes to editors:
UK Music’s Letter to the Chancellor can be found here.
The Chancellor reduced the VAT rate on live events from 20% to 5%
in July 2020, before raising it to its current level of 12.5% on
October 1 2021. The Treasury is set to hike VAT to 20% on
April 1. The reality is the music industry received little
benefit from the lower VAT rates because live music did not
return until summer 2021- and did not return fully until the
easing of all COVID-19 restrictions earlier this year.
