‘Cost of gigging crisis’: Music industry leaders warn of ‘hugely damaging’ VAT hike on concert tickets

Music industry leaders are urging Chancellor Rishi Sunak to abandon a large increase on concert and live event tickets, due to come into force on 1 April.

The 7.5% hike would see the tax return to its pre-pandemic level of 20% – a move that would impact music lovers and be “hugely damaging” to the industry, according to trade body UK Music.

VAT is currently charged at 12.5% on tickets for live events, but went down to 5% at the height of the pandemic.

Chief Executive Jamie Njoku-Goodwin has written to Sunak, in a bid to change his mind ahead of his mini-budget as part of the spring statement on 23 March.

Mr Njoku-Goodwin says millions of music fans would be likely to face a rise in ticket prices resulting from the increase, at a time when the cost of living is already pushing many to the limit.

The move would also come as a kick in the teeth for the industry following two years of near shutdown.

Before the pandemic, the UK music industry contributed £5.8 billion to the UK economy and supported almost 200,000 jobs, according to the latest figures from UK Music.

However, due to COVID, hundreds of festivals and live music events – including Glastonbury – were cancelled.

Almost one in three jobs in music was lost during that time, leaving the largely self-employed workforce to seek work away from the sector.

Read more: How COVID impacted emerging performers

In his letter Mr Njoku-Goodwin writes: “The planned hike in VAT could not come at a worse time for millions of music fans and the live music industry, which was shut down for almost two years due to the pandemic.

“We saw during those grim periods of lockdown just how important music was to people’s mental health and how it helped us get through some really tough times.

“Pushing up VAT to 20% would be hugely damaging for the music industry and leave music fans facing a cost of gigging crisis. The rise would come at a time when we are rebuilding post-COVID-19, with hundreds of concerts planned over the next few months.

“We would urge the Chancellor to give people who already face rising prices and grim headlines every day a little lift by ditching the ticket tax and abandoning the VAT hike.

“Dumping the planned VAT hike would help keep ticket prices down for fans and help music businesses pay down debts they built up during the pandemic, generate thousands of new jobs and nurture new talent.

“It would help the music industry continue to recover and rebuild after the COVID-19 pandemic, which wiped out around one in three jobs in our sector.”

UK Music also suggests a six-point plan for the music industry, including extending the current 50% discount on business rates on music venues, and more funding to help British performers touring the EU to navigate extra costs and post-Brexit red tape.

UK Music is also calling for a Music Export Office to help boost sales of British music abroad, which dropped 23% from £2.9 billion in 2019 to £2.3 billion in 2020 due to COVID-19.

The trade body say music should benefit from the same type of tax breaks as UK film, TV and video firms.

The UK already has one of the highest rates of tax for hospitality in Europe. In France and Spain, the VAT rate is set at only 10%. It is just 7% in Germany and 6% in Belgium.