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Martin Goldschmidt calls on government to provide tax breaks for music

By | Published on Monday 18 May 2015

Martin Goldschmidt

In his #VoteForMusic keynote at CMU Insights @ The Great Escape Cooking Vinyl MD Martin Goldschmidt called on the music industry to lobby the new government for tax breaks to help boost the recorded music industry. Here are his key points…

I want to talk about government providing tax breaks to help the recording industry. At the moment there are a few schemes that can help us release new music – like VCT and ICT schemes. And we as a company have benefited fantastically from them. For example, Ingenious, employing one of those schemes, helped fund our first album with The Prodigy in 2009, which was a huge lift to the company. And then we worked with Icebreaker on The Cranberries, Marilyn Manson, and others.

But those are tax breaks for investors. They do benefit our industry, and I’m not saying we should get rid of them, but why don’t we have something that directly benefits the record business, rather than doing so via those private investors and their funds.

The obvious move is to have a tax break on recording itself. There’s support for R&D in many other industries – the pharmaceuticals industry, for example – and far closer to home we see tax breaks for film, games, theatre, and there’s one coming in for orchestras in April 2016. So you’ve got big tax breaks in the creative industries. But the one for orchestras specifically excluded rock and pop, because they don’t want to give money to Coldplay.

But if you have 25% tax break on recordings, and 50% of the money had to be spent in the UK, that would have so many benefits. It would definitely benefit record companies, but that’s a na├»ve way to look at it. Most of the records we release are funded by the artist and licensed to us, and they would benefit too.

A lot of the tax breaks for other sectors are because they’ve been hit hard by the internet. But what industry has been hit harder that music? None. And recording studios and session musicians have been hit far harder than labels. It’s not just about us record companies. It would help the whole recording industry sector, create jobs and then extend benefits to the wider creative industry.

One of the offshoots of the crisis we’ve had at record companies, with income down 45%, is that everyone’s got far more risk averse. We’re not taking as many risks, and some of the more risky stiff is not getting funded. Tax breaks would help us make far better and more culturally diverse music. Stuff where people say “this is crazy” when they first hear it, but then they fall in love with it.

I call on the industry to make the case for tax cuts to the government. And let’s get better at speaking to government too. Tax breaks in this country aren’t there for music, they’re given to financial services. Why? Because they’re great at lobbying government. We’re good at fighting between ourselves. We need to have one voice, and then go to government to make this happen.