UK music industry calls on government to slash VAT on tickets for survival

The UK music industry has called on the government to slash VAT on concert tickets to help ensure the sector’s survival.

UK Music, which is the collective voice of the UK music industry, has urged Chancellor Jeremy Hunt to cut VAT in the spring Budget to throw the sector a “vital lifeline” and save venues that are threatened by closure.

• READ MORE: 2023 was “worst year for venue closures” while “no one in music industry seems to care”, say MVT

Tom Kiehl, UK Music’s Interim Chief Executive, has asked Hunt to use his Budget next Wednesday (March 6) to lower the current 20 per cent VAT rate on tickets to 10 per cent as a “boost for consumers, music professionals and venues”.

The request to slash VAT is among the recommendations that UK Music has made to the government in its Budget submission, which outlines the support the sector needs to grow (read it in full here).

Currently, music fans in the UK must pay 20 per cent VAT on their tickets – almost double the EU average (10.3 per cent), and around triple the rate in countries like Belgium (six per cent) and Germany (seven per cent).
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The 20 per cent rate is the third highest rate of cultural ticketing in Europe. Gig-goers pay more tax on UK tickets than anywhere else in Europe, except Denmark and Lithuania.

The calls come amid growing concerns for the survival and future of grassroots venues. A recent Music Venue Trust (MVT) report showed the “disaster” that struck these venues nationwide last year.

The findings revealed that 125 UK venues abandoned live music in 2023 (approximately two per week) and that over half had shut entirely. At the time, MVT CEO Mark Davyd said: “This is a disaster: 16 per cent of the grassroots music venues in this country closed in the last 12 months. It’s just not good enough.”

Some of the more pressing constraints were reported as soaring energy prices, landlords increasing rate amounts, supply costs, business rates, licensing issues, noise complaints and the continuing impacts of COVID-19.

‌Kiehl said in a statement: “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.
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“Cutting VAT on tickets to 10 per cent 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.”
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He continued: “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. Venues are part of a wide music ecosystem, which needs support in a number of important areas to help the sector grow and thrive.”
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Additionally, the UK Music chief warned that government action was needed across a range of areas to ensure the sector can grow amid intensifying competition from overseas markets.

Kiehl explained: “There are serious concerns about the potential impact that AI could have on music creators and the threat it poses to their income and copyright.
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“The music industry’s talent pipeline faces an existential crisis unless more music teachers are hired to nurture the next generation of stars. The government should continue and extend its support for music export schemes and tackle the barriers still facing musicians and crew touring parts of the EU.”
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He added: “We need the Chancellor to further extend Orchestra Tax Relief at its current level to help safeguard the future of our fantastic orchestras. The UK has a world-leading music sector. However, it needs action from the government to ensure it can continue to grow for decades to come.”

A report by UK Music last year showed that an estimated 14.4million “music tourists” travelled to enjoy live music at venues across the UK in 2022. Music contributed £6.7billion to the UK economy in 2022 and employed around 210,000 people, according to the figures.
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‌The MVT, meanwhile, estimated every £10 spent on a live music ticket was worth £17 to the local economy.
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In addition to the call for a VAT cut, UK Music’s Manifesto For Music sets out five additional key recommendations:

• Invest millions more in music education and recruit and train an army of new music teachers
• Ensure AI supports human artistry through strong copyright standards, clear labelling and record-keeping requirements, and contains protections for the personality rights of music makers
• Fix the European touring crisis by securing a Cultural Touring Agreement with the EU to help cut red tape and soaring costs
• Introduce a tax credit to encourage new UK music production
• Secure a fair deal for music lovers by ending rip-off secondary ticketing practices

Davyd of the MVT has welcomed UK Music’s VAT proposal, saying that the 10 per cent reduction would release approximately £2.5million into the grassroots scene (via The Independent).

There have been increasing calls for a ticket levy on larger arena and stadium shows, and a push for investment from the wider industry to save grassroots venues from closure. The suggested VAT cut would create the profit gap needed to enable these bigger venues to offer a tax levy to further help support grassroots spaces, Davyd said.

Davyd commented last month: “If the big companies in this industry don’t get their act together, then hundreds of venues will close. And guess what? They didn’t get their act together and hundreds of venues have closed. So, I’m afraid you are now going to have to answer for this.”

Last week, entertainment giant Live Nation reported 2023 as its biggest year ever for concert turnout and ticket sales – despite two UK grassroots venues per week being forced to close.

The company, which owns Ticketmaster, announced that its revenue jumped 36 per cent to $22.7billion during a year that saw huge record-breaking tours from Taylor Swift and Beyoncé.

Last year, Ticketmaster sold 620million tickets (a 13 per cent increase from 2022) and its revenue went up by 32 per cent to nearly $3billion.

Responding to these numbers, the MVT’s Mark Davyd said that “all 125” of the affected grassroots venues “could have been saved for somewhere in the region of £3million; about $3.8million. That’s just 0.06% of Live Nation’s additional revenue this year.

“Not their total revenue, their additional revenue. That is the additional revenue Live Nation made in the year those venues closed down […] And even if you show them these maths they still insist that a sustainable grassroots sector is an unaffordable financial burden on the industry.”

He added: “The economic maths of the live music industry is completely bonkers and it cannot possibly continue.”

Meanwhile, Featured Artists Coalition (FAC) CEO David Martin recently argued that while the battle to save venues was essential, work was also needed for the ecosystem to tend to the needs of young artists and new audiences.

In other news, the MVT has criticised the Welsh budget for putting hundreds of jobs and grassroots venues at risk.

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