Christopher BarrettMusic business representative body UK Music has called on chancellor Rishi Sunak to ditch the planned VAT hike on live event tickets to 20% from 1 April, claiming it would be hugely damaging to the industry.
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 1 October 2021. UK Music said the live events industry received little benefit from the lower VAT rates because live events did not return until summer 2021, and did not return fully until the easing of all Covid-19 restrictions earlier this year.
Ahead of the chancellor’s Spring Statement on March 23, when he will outline a mini-Budget, UK Music CEO Jamie Njoku-Goodwin has written a letter to Sunak to highlight the impact that the VAT rate rise on tickets could have on both fans and the industry. At a time when inflation is soaring, UK Music and promoters are concerned that the rise in VAT will result in further pressure to substantially raise ticket prices.
In his letter to the chancellor Njoku-Goodwin outlined a six-point plan for the music industry that involves 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 also 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 music industry body also wants the music industry 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. It is also seeking more help for the self-employed, who make up more than two-thirds of the UK music industry.
Njoku-Goodwin 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.”