UK Music chief executive Jamie Njoku-Goodwin has said he will keep the pressure on the UK Government over the proposed VAT rise on tickets in April, after Chancellor Rishi Sunak (pictured) failed to abandon the plans during his spring budget.
The Government is set to raise the VAT on ticketing from 12.5% to 20% from next month. It had been lowered during the pandemic to aid the recovery of the ticketing and live entertainment and events sector.
While Sunak provided some support in the form of an extension on lowered business rates which will benefit music venues, his failure to address the VAT hike has angered industry figures.
Njoku-Goodwin said: “After two years of devastation from the pandemic and fresh economic challenges coming down the track, the music industry has been desperate to get back on its feet and get the support we need to secure a sustainable recovery.
“So, we welcome the confirmation of the extension of business rates relief that will benefit many music venues.
“However, the spring statement missed the opportunity to help the UK music industry at a crucial point in its fightback from the impact of COVID-19.
“We are disappointed that the Chancellor failed to abandon his planned VAT hike in April from 12.5% to 20% on ticket prices, which would have been a lifeline to grassroots music venues in particular.”
He added: “The tax hike is likely to mean that ticket prices could increase at a time when household budgets are already stretched because of the rising cost of living.
“As the collective voice for the UK music industry, we will continue to press the Government to help the music industry play a leading role in the post-pandemic recovery.”
Association of Independent Festivals CEO Paul Reed has also outlined his dismay about the VAT hike still going ahead.
“We are disappointed that the Chancellor has not responded to our repeated calls to grant an extension to the 12.5% VAT rate on festival tickets beyond the end of March,” said Reed.
“Festival organisers are experiencing cost increases of between 20-30%, which is way beyond rapidly rising inflation, with extreme pressure along the entire supply chain. We urge the Government to look at this again and maintain the reduced rate on VAT.
“We also ask the Government to urgently reconsider the removal of tax incentives to use certain biofuels. These should be maintained at the current rate as a transitional measure to encourage use of greener fuels at festivals. To do otherwise is completely contrary to the Government’s objectives of incentivising energy efficiency and reducing emissions.”
Njoku-Goodwin highlighted future issues hindering the recovery of the live entertainment and music sector, including fiscal incentives enjoyed by similar industries and the self-employed.
He said: “We would like to see the Government pave the way for the music industry to enjoy the same kind of fiscal incentives enjoyed by the film, television and animation industries. This would encourage investment and help us nurture the talent pipeline for our world-leading music industry.
“The Government must also look at more support for the self-employed who were among the hardest hit by the pandemic, particularly in the music industry where two-thirds of the workforce are self-employed.”
Image: Chris McAndrew/ CC BY 3.0/Edited for size