Government urged to maintain 5% VAT rate on tickets to support venues through “desperate times”

The tax reduction was introduced last year, but prolonged closures mean that venues are yet to directly benefit from it

Leading figures across the live events industries have called on the UK Government to maintain the 5 percent VAT rate on ticket sales, which was introduced to help the struggling sector last year.

The new appeal has been delivered in a letter, signed by industry figures representing thousands of businesses across the UK, to Chancellor Rishi Sunak ahead of March’s budget.

The tax reduction was initially introduced in July last year, but the prolonged closures of venues due to the coronavirus pandemic means that they are yet to directly benefit. It is now feared that the VAT rate could now rise to 20 percent, striking a direct blow to beleaguered venues.

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Greg Parmley, CEO of 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.”

Julian Knight MP, Chair of the Digital, Culture, Media and Sport Committee, added: “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 percent 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.”

The campaign has also been backed by Mark Davyd, the CEO of the Music Venue Trust. In an appeal to Rishi Sunak on social media, Davyd wrote: “Your government cut VAT on tickets to 5& last year. This was a sensible, budgeted, intelligently designed intervention that achieved the aim of providing maximum support to the music industry at the minimum cost and administration.

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“Since announcing that year long VAT break, hardly a single ticket has been sold. The financial support offered hasn’t yet been used, and it is still badly needed for our industry to recover. You, as Chancellor, designed a sensible package of support that would have real impact. You budgeted for how much it would cost, and planned for it to be delivered. It couldn’t then be delivered.

“Don’t take away that offer of support. Let the industry use it the way you always planned it would, to support our recovery and to invest back into the people and businesses who have lost so much in this crisis.”

The letter comes amid ongoing uncertainty surrounding when live music will be able to return in its fullest form.

Some festivals, such as Manchester’s Parklife and London’s The Mighty Hoopla, have moved their events from earlier in the summer to September to stand a greater chance of being able to take place, while some artists, including The 1975 and Nick Cave & The Bad Seeds, have completely scrapped their 2021 tours rather than postponing them.

Glastonbury, meanwhile, has been forced to take an enforced fallow year for 2021.

Elsewhere, figures from across the UK’s live music industry have warned that a “massive” amount of jobs and taxable income will be lost to the EU under the current Brexit deal, due to it making touring “nigh on impossible”.

Prime Minister Boris Johnson’s Brexit trade deal has failed to secure visa-free travel for UK artists and their crew wishing to tour Europe, adding huge costs to future live music tours of the continent and potentially preventing rising and developing artists from being able to afford it.

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