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Business

Mini-budget a ‘missed opportunity’ to help sector 

UK Chancellor Kwasi Kwarteng revealed a ‘mini-budget’ today that outlined a series of tax cuts, however members of the creative and entertainment sector feel the support is not enough. 

While the basic rate of income tax has been cut, the 45% top rate of tax for higher earners has been abolished, and an increase in National Insurance and corporate tax has been scrapped, industry figures believe an opportunity to help businesses has been missed.

Hannah Essex, co-chief executive of Society of London Theatre and UK Theatre, said in a statement: “The UK’s world-leading creative and cultural sector, of which theatre is a significant part, grew four times the rate of the UK economy before COVID-19.

“The Society of London Theatre & UK Theatre is concerned that the specific challenges faced by the sector were not addressed during the Chancellor’s statement, and the opportunity to commit to supply-side incentives, such as maintaining the higher rate of Theatre Tax Relief, was missed.

“Independent economic modelling undertaken in 2021 revealed that, with the right fiscal incentives, by 2025, the UK’s creative and cultural Industries could contribute £132.1bn in GVA – more than the financial services, insurance and pension industries combined.”

However, Essex said the Society of London Theatre and UK Theatre welcomed the Chancellor’s commitment to growth, supply-side incentives and reform.

She added: “We agree that the UK economy has huge potential, and there are too many barriers to enterprise.

“We hope that the government will recognise the strength of the theatre sector as an entrepreneurial and SME-led economic driver, locally, nationally and globally. We look forward to working with the Government to ensure that theatres and performing arts organisations are best positioned to contribute to their Growth Plan.”

The Night Time Industries Association (NTIA)’s CEO Michael Kill echoed this morning’s mini budget being a missed opportunity.

“We are extremely disappointed with the Chancellor’s announcement this morning,” said Kill.

“It will be seen as a missed opportunity to support businesses that have been hardest hit during this crisis, causing considerable anxiety, anger and frustration across the sector as once again they feel that many will have been left out in the cold.

“We have been extremely clear with the Government that the “Energy Bill Relief Scheme”, even with the announcement of the limited tax cuts on National Insurance, Corporation Tax and Duty, is unlikely to be enough to ensure  businesses have the financial headroom to survive the winter, especially with yesterday’s announcement of the rise in interest rates from the Bank of England.

“I would urge the Chancellor and Government to reconsider these measures, given the limited impacts of the current tax cuts on the immediate crisis for many businesses across the sector, the extremely vulnerable position the night time economy and hospitality sectors remain in, and re-evaluate the inclusion of general business rates relief and the reduction of VAT within these measures.”

LIVE (Live music Industry Venues and Entertainment), a music business trade body in the UK, is also calling for a reduction in VAT, in particular on ticket sales, as well as a major reform of business rates.

The trade body also recently wrote an open letter to Kwasi Kwarteng, urging him to cut the VAT rate on music ticket sales.