The music industry has sent two letters to the UK government calling for changes to the rules around business rates, with both recording studios and music venues facing significant challenges under the current system.
The Music Producers Guild has written to Chancellor Of The Exchequer Rachel Reeves as part of its ongoing Save Our Studios campaign, calling for recording studios to be included in the ‘retail, hospitality and leisure’ business rates relief scheme, which would reduce the tax burden on studio businesses.
Meanwhile live sector trade group LIVE has written to Prime Minister Keir Starmer to highlight the “devastating, unintended consequences” of changes made to business rates in the recent budget.
The MPG’s letter notes that recording studios across the UK “provide a huge boost to local economies and much-needed opportunities for young, aspiring music professionals”, including paid training positions which “means more people from low-income backgrounds can enter the industry”.
However, having “battled through the ravages of COVID and shouldered soaring energy prices”, studios are now “facing incredible hardship due to the demands of business rates”. So much so, in a recent MPG studio survey, 50% of respondents said they were considering closing their doors for good at some point in the next year. That’s in addition to the dozens of studios that have already closed in recent years.
A key problem, the letter says, is that “studios do not have their own business rates classification and are currently classified as office space”, which is “the most expensive bracket”. As a result, studios do not receive targeted business rates relief, “despite their significant cultural and economic contributions”.
“Simply giving recording studios their own classification within the business rates framework”, the letter says, and allowing studio businesses to benefit from rate relief schemes, would help studios overcome their current financial challenges “at a very limited cost to the Treasury”.
LIVE’s letter to Starmer relates to the impacts of changes being made within the business rates system, in particular the “disproportionate, inappropriate and unjustified rises in the valuation of properties” by the Valuations Office Agency, and the “increased business rates multiplier for large event venues”.
These changes, the letter says, will hit venues operating at all levels, with grassroots venues impacted by revaluations and arenas by the increased multiplier. “Hundreds of grassroots music venues will close”, the letter says and “ticket prices for consumers attending arena shows will increase as the dramatic rise in arena’s tax costs will likely trickle through to ticket prices”.
“Smaller arenas in towns and cities across the UK will teeter on the edge of closure”, it adds, “potentially resulting in thousands of jobs losses and hollowing out the cultural spaces that keep places thriving”.
The outcomes of these changes to business rates, the letter explains, “will undermine the government’s own Industrial Strategy and Creative Sector Plan, which committed to reducing barriers to growth for live events”.
To mitigate these risks, LIVE calls on the government to implement “immediate 40% business rates relief for our venues”, while also committing to “fundamental reform of the valuation system”.