Art And Entertainment

Theatre and Live Entertainment Sectors Plea To Government For Continued VAT Reduction

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Leaders across the music, theatre and events industries have come 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 was made in a letter to the Chancellor Rishi Sunak, ahead of the Budget in March, and has been signed by the heads of leading associations representing thousands of businesses across the industry.

To support these world-leading industries the Government has reduced the rate of VAT on ticket sales from 20% to 5%. The move was widely welcomed at the time as it was hoped it would help to revitalise businesses devastated by the pandemic, but the industries are yet to benefit due to being almost completely closed since last March. 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, 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 Bird, Chief Executive of SOLT and UK Theatre, said: “The theatre industry, alongside others in the performing arts and live events sector, was first into lockdown last March, and will almost definitely be one of the last out. With a usual annual audience of over 34m, generating around £1bn for the Treasury every year, the UK’s theatres contribute hugely to the economic and cultural life of this country, and will be key for local recovery. It is vital that the Government helps ensure the industry’s survival by continuing the reduced VAT rates.”

The Department of Digital, Culture, Media and Sport 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 Digital, Culture, Media and Sport 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.”

Lucy Noble, Chair of the National Arenas Association, said: “The whole sector has been brought to its knees by the pandemic. Increasing VAT on tickets by 400% at this time could be the final nail in the coffin for many in the music industry. And at precisely the moment when people urgently need the joy of music in their lives.”

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. 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.