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While the sector’s trade organisations have welcomed some relief offered by the UK Chancellor’s latest Spring Budget, they feel that the support falls "woefully" short.
Yesterday (Wednesday), Chancellor Jeremy Hunt said Theatre Tax Relief would be 40%, with a 45% rate for productions that tour. The decision replaces the planned taper from April 2025 (to 35% and 30% respectively) and a return to the pre-pandemic rate (25%/20%) in 2026.
The Society of London Theatre (SOLT) and UK Theatre said this new permanent rate “will unlock more and bigger productions”. They added that the move will create more jobs in the theatre sector.
While this move has been appreciated, Jon Collins, chief executive of LIVE, said: “LIVE welcomes the Chancellor’s announcement that the tax reliefs for orchestras and theatres will be made permanent. However, the 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 (€1.2m/$1.3m) 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.”
The cry for relief extends to festivals and events, with Association of Independent Festivals (AIF) also calling for a temporary reduction in VAT on ticket sales from 20% to 5%.
“We’re disappointed that our calls for support for the UK music festival sector have not been met,” said 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 this week – 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 welcomed the move to offer theatre and orchestras forms of permanent tax relief, but added: “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 of other creative sector tax reliefs and seek further government consideration for the introduction of a tax credit to encourage new UK music production.”
Additionally, the Night Time Industries Association (NTIA) said that the decision to freeze duty on alcohol and fuel, and the increase in the VAT threshold would provide some relief for night time businesses.
However, as voiced by chief executive Michael Kill, more was needed to protect night time economy businesses and jobs.
“The economic challenges faced by our sector are catastrophic, and following today’s Spring Budget announcement, the lack of support will have a profound impact on this sector for years to come,” said Kill.
“For months, the entire sector has been providing the government with critical information outlining our precarious situation and the urgent need for supportive measures to sustain businesses through these turbulent times.”
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