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COVID-19 VAT break will apply to live music, culture minister confirms
By Chris Cooke | Published on Thursday 9 July 2020
UK culture minister Oliver Dowden has confirmed that a VAT cut announced by the Chancellor Of The Exchequer yesterday will apply to gigs and concerts.
The sales tax cut was among a number of new measures announced by Chancellor Rishi Sunak yesterday as part of efforts to help the British economy recover as the COVID-19 shutdown slowly comes to an end. He said that VAT paid on the sale of “hospitality and leisure services” would be reduced from the usual 20% to 5% from next week.
Companies who qualify for the cut can decide whether to pass the saving on to customers – in a bid to lure them back in post-shutdown – or to pocket the difference to help overcome losses they have incurred as a result of the COVID-19 pandemic. Or a bit of both.
A VAT cut of this kind is one of the things the live music industry has been calling for, alongside sector-specific financial support. However, following Sunak’s announcement yesterday, it wasn’t entirely clear what was covered by “hospitality and leisure services”.
Dowden subsequently posted on Twitter: “Pleased to confirm VAT cut from 20% to 5% for ‘attractions’ announced by Rishi Sunak includes: shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas and exhibitions”.
The VAT cut is currently set to run for six months. Which arguably makes it less useful for the live sector than bars and restaurants, as it’s still not clear to what extent live music will be able to return in the months ahead.
That said, the VAT is charged as a ticket is sold, so providing there are plenty of ticket sales in the next six months, promoters and venues will feel the benefit.
With the VAT cut coming just days after ministers committed to £1.57 billion of sector-specific financial support for the cultural and heritage industries, things have moved on quite a lot in the last week in terms of government helping the creative sector weather the COVID-19 storm.
Though the significant challenges faced by the creative sector, including the music industry, are by no means over. Only the live side of the music industry will benefit from the VAT cut and it remains very unclear how the £1.57 billion will be shared out.
Meanwhile, criticism remains that the government is refusing to extend the general COVID-19 support programmes – including the furlough and freelancer schemes – even though some sectors, like live music, could be in some form of shutdown until the end of the year.
And, of course, ministers continue to ignore the huge number of self-employed people – including many in the music industry – who have so far fallen through the gaps and received no government support at all.
