Did the Spending Review deliver for live music? Here’s our verdict27.10.2021.
Ahead of the Chancellor’s second full Budget of 2021, the live music sector had several key priorities: COVID recovery, VAT, easing the impacts of Brexit, and an insurance scheme that works. So where did we get to?
There was some good news for the sector with an additional £850m in culture sector funding, which includes music. The majority of this money is ring-fenced, but the rest should be available for the sector to apply for. Further detail of this will be provided in due course.
In addition, the Government is introducing a new temporary business rates relief in England for eligible retail, hospitality, and leisure properties for 2022-23, worth almost £1.7 billion. It is also freezing the business rates multiplier in 2022-23, a tax cut worth £4.6 billion over the next five years. Both these measures have the potential for benefits across the sector.
Elsewhere, the Government has made some movement on tax relief, although these are largely applicable to theatres, museums and galleries – however, it will increase the headline rates of relief for Orchestra Tax Relief. Similarly, on COVID-19 recovery, the Government has committed to providing £52 million in new funding for museums and ‘cultural and sporting bodies’ next year to support recovery from COVID-19 and an additional £49 million in 2024-25. We wait to see whether music will be eligible for this funding.
So, there was some good news. But a CTRL F on the budget document for music returns precisely zero results. Notably absent was any improvement to the beleaguered reinsurance scheme or the much called for an extension to the VAT break on tickets sales. There was also no cash allocated to help the sector deal with the impact of Brexit on touring. So, all in all, this year’s spending review feels slightly lacklustre in terms of support for the UK’s vibrant live music scene.
Here’s the verdict on the budget from Greg Parmley, CEO, LIVE:
“We’re glad to see that live music will receive some benefit from today’s Spending Review – including tax relief, business rates, and some extension in terms of funding.
“However, with the word ‘music’ completely absent from today’s announcement, we remain steadfast in our drive to see Government pay attention to the key issues we are facing: the impacts of Brexit, the recovery from COVID and the long-term growth of the sector. We need Government to give us the tools to make progress, which were, unfortunately, missing from today’s news.”
A roundup of today’s commitments
Additional £850m in culture sector funding
- £300m is ringfenced for ‘arm’s-length’ body estate maintenance for museums, galleries and cultural hotspots to redevelop and refurbish their sites.
- This fund is supplementary to regular annual grant-in-aid subsides for the 15 national museums, sponsored by DCMS.
- In addition, they have announced £125m will go towards helping to build the National History Museum’s new scientific research centre in Oxfordshire and another £75m will be spent to help 110 regional museums and libraries improve their buildings and digital facilities.
- Sunak also announced £200m for new Beatles attraction on the Liverpool waterfront.
- The government will also provide £14 million each year to support creative industries, including support for SMEs.
- The government has committed to providing £52 million in new funding for museums and cultural and sporting bodies next year to support recovery from COVID-19 and an additional £49 million in 2024-25 thereafter.
- How this money will be allocated and by whom is yet to be announced.
Business rates relief
- The government plans to retain business rates with key reforms:
- Introducing more frequent re-evaluations every 3 years from 2023.
- Until 2035, plant and machinery used onsite for renewable energy will be exempt from business rates altogether.
- From 2023, for 12 months, every business will be able to make property improvements without paying additional business rates on those improvements.
- Next year’s planned increase in the multiplier will be cancelled.
- The government is introducing a new temporary business rates relief in England for eligible retail, hospitality, and leisure properties for 2022-23, worth almost £1.7 billion. Over 90% of retail, hospitality and leisure businesses will receive at least 50% off their business rates bills in 2022-23.
- The government is also freezing the business rates multiplier in 2022-23, a tax cut worth £4.6 billion over the next five years. This will support all ratepayers, large and small, meaning bills are 3% lower than without the freeze.
Business rates reform
- The government is investing in the Valuation Office Agency (VOA) to upgrade digital capabilities and ensure a high-quality service for taxpayers.
- The settlement increases the VOA’s annual budget to more than £170 million by 2024-25, with the VOA receiving more than £500 million over the next three years.
- The settlement delivers:
- £80 million in funding to support Revaluation in England.
- Funding to implement the Fundamental Review of Business Rates for England, including more frequent revaluations and greater transparency on valuations.
- The government outlined its recommitment to funding the £800 million Live Events Reinsurance Scheme and an extension to the £500 million Film & TV Production Restart Scheme, to enable UK events and productions to thrive and plan with certainty.
- The tax relief on museums and galleries that was due to end in March 2022 will be extended for another two years.
- The government will increase the headline rates of relief for Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR), and Museums and Galleries Exhibition Tax Relief (MGETR).
- From 27 October 2021, the headline rates of relief for the TTR and the MGETR will temporarily increase from 20% (for non-touring productions) and 25% (for touring productions) to 45% and 50%.
- From 1 April 2023, the rates will be reduced to 30% and 35% and will return to 20% and 25% on 1 April 2024.
- For MGETR, the relief will expire on 1 April 2024 and no expenditure from this date will be eligible for relief.
- From 27 October 2021, OTR rates will temporarily increase from 25% to 50%, reducing to 35% from 1 April 2023 and returning to 25% on 1 April 2024.
- For theatres, the tax relief for the sector will be doubled until April 2023.
- Overall, the Government announced tax relief measures for the culture sector worth £0.25 bn.
VAT break on ticket sales
- The Chancellor did not extend the VAT break on ticket sales.
- The current rate of 12.5% will last from 1 October 2021 to 31 March 2022, at which point the rate will return to the usual 20%.
- There has been an increase in funding for all Government departments.
- The Department for Digital, Culture, Media and Sport (DCMS) settlement provides a £0.6 billion cash increase over the Parliament to £2.7 billion in 2024-25, which is equivalent to a real-terms growth rate of 2.9% per year on average over the SR21 period.
- The settlement invests in digital connectivity, culture, innovative industries and community cohesion across the UK, supporting a thriving and connected society.