The Association Of British Orchestras has warned that the UK's classical music industry faces financial ruin following a ruling by those nasty tax officials.
The Inland Revenue reckons orchestras in the UK owe £33 million following confusions over the payment of National Insurance. The confusion followed a change in the law in 1998 after which freelance singers and musicians hired by orchestras were classed as self employed for most tax purposes, but as employees for NI purposes - meaning the orchestra would pay national insurance contributions on behalf of their freelance employees. But the Inland Revenue now say that the way orchestras having been calculating these contributions since 1998 has been incorrect, hence the large deficit.
While the Inland Revenue insists the deficit must now be paid, the Association Of British Orchestras, who claim the NI error has come about because their members were badly advised by tax officials back in 1998, say that if the industry is forced to pay up the £33 million it will put many orchestras out of business. One estimate says as many as four out of five may have to cease operations.
In a statement the ABO said: "There is a real danger that if this matter is not resolved one of the leading orchestral sectors in the world will be severely affected with likely closures and would cease to be of international quality and significance", while their chairman, Michael Henson, told the BBC: "I think this is an industry-wide issue, the issue affects every major orchestra and smaller orchestra in this country and would have huge effects upon how they operate".
The government's lovely Department of Culture, Media and Sport, however, has played down the crisis potential of the issue, even though the tax debt would wipe out most of the £35 million investment it has made itself in the classical sector. A spokesman said they were in discussions with all parties to seek a way forward, adding: "We appreciate that the situation is very serious and clearly it needs to be resolved quickly and fairly between both sides and that's what we are trying to establish at the moment."