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Events groups urge Government to extend reduced VAT rate for tickets

Leaders from across the music, theatre and events industries have banded together to issue an urgent plea to Government to maintain the 5% VAT rate on ticket sales, brought in to help the beleaguered industry last year.

The appeal has been made in a letter to the Chancellor Rishi Sunak, ahead of next month’s Budget, and has been signed by the heads of leading associations representing thousands of businesses across the industry. 

The Government’s decision to reduce the rate of VAT on admission to certain attractions from 20% to 5% last July was widely welcomed at the time as it was hoped it would help to revitalise businesses devastated by the pandemic.

However, the industries are yet to benefit from the reduction — planned to run until March 31, 2021 — due to being almost completely closed since last March.

Campaigners say that if the Government raises VAT now, then it will have been a pointless policy and will pull millions of pounds of support just at the time it is needed the most.

Greg Parmley, chief executive of industry group LIVE (Live music Industry, Venues & Entertainment), said: “The live music industry supports hundreds of thousands of skilled jobs across the UK and brings in billions of pounds for the UK economy.

“This policy was brought in to support our industry during these desperate times but currently we are still closed. Reversing this policy before we can start to sell tickets again would be perverse and cripple our recovery.”

The Department of Digital, Culture, Media and Sport (DCMS) Select Committee recommended a three-year extension to the 5% VAT policy in their report “Impacts of COVID-19 on DCMS Sectors” in July last year.

Julian Knight MP, chair of the DCMS Committee said: “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’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.”

LIVE says that prior to the outbreak of the pandemic, the UK’s creative industries were growing at five times the rate of the wider economy, generating £11.25bn in GVA each year and supporting over 600,000 jobs.

LIVE added: “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.”

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