Cross-sector trade group UK Music has called on Chancellor Of The Exchequer Jeremy Hunt to use his budget statement next month to finally cut the VAT charged on tickets.
"Cutting VAT on tickets to 10% would be a vital lifeline and could mean the difference between saving and losing some of our most loved music venues, which are key parts of many local economies and communities”, says the organisation’s interim CEO Tom Kiehl.
"Reducing the tax burden will help boost investment at grassroots level and give local venues and economies across the UK a much needed shot in the arm”, he adds.
The music industry has repeatedly called for a VAT cut on tickets to be introduced, like that implemented during the COVID-19 pandemic. That would mean artists and promoters could make more money from each ticket sale without increasing the price the fan pays.
Currently, on a £24 ticket, £4.00 is paid in VAT, leaving £20.00 in the pot to be shared by artist, promoter and venue. If the VAT was halved, there would be £21.82 in the pot instead. And while that’s a small difference on each ticket, it results in decent extra revenue when, for example, 500 tickets are sold - because there would be an additional £910.
Artists, promoters and venues operating at the grassroots and even mid-tier of the live sector are struggling as their overheads surge but the cost of living crisis is already affecting the amount of disposable income people have available to spend on going out. The VAT cut, therefore, could prove to be a lifeline for many live businesses.
Earlier this month, the Association Of Independent Festivals launched its ‘5% For Festivals’ campaign, calling for an even more dramatic VAT cut to 5%
In its latest statement, UK Music contrasts the VAT rate on tickets in the UK with elsewhere in Europe. “At present, UK gig-goers must pay 20% VAT on their tickets - almost double the EU average (10.3%) and around triple the rate in countries like Belgium (6%) and Germany (7%)”, it explains. “The 20% rate is the third highest rate of cultural ticketing in Europe. Music lovers pay more tax on UK tickets than anywhere else in Europe, bar Denmark and Lithuania”.
"We urgently need to see some action from the Chancellor in the budget to support the UK music industry at what is an immensely tough time for many venues and for those working in our sector”, Kiehl continues. "Venues are part of a wide music ecosystem, which needs support in a number of important areas to help the sector grow and thrive”.
UK Music also lists its other priority issues ahead of the government’s budget statement on 6 Mar, including the need for more support in music education and music export, the extension of orchestra tax relief, and clarity on the copyright obligations of AI companies.