Today, the Chancellor, Rishi Sunak unveiled a number of fiscal adjustments in his spring statement, unfortunately he didn’t maintain the current lower rate of VAT on ticket sales, measures for small businesses include:
- A 50% business rates discount for the retail, hospitality, and leisure sectors up to £110,000, which will be frozen in 2022-23. This will take effect in a week’s time. According to Sunak, the typical pub will save £5,000.
- The Government will also freeze the business rates multiplier for another year saving businesses £4.6 billion over the next 5 years.
- Other existing support measures for small businesses include:
- A ‘Help to Grow’ management scheme for SMEs
- Increasing the Annual Investment Allowance to £1 million for SMEs.
- An Employment Allowance (which allows eligible businesses to reduce their employer National Insurance contributions bills each year) increase. In two weeks time, the Employment Allowance will increase from £4,000 to £5,000, worth up to £1,000 for up to half a million businesses.
- Introducing a temporary super-deduction, for investment. Under the super-deduction, for every pound a company invests, their taxes are cut by up to 25p.
A number of industry groups issued reactions:
Greg Parmley, CEO, LIVE said:
“Live music is facing new and unprecedented challenges that threaten to wreck one of the UK’s cultural crown jewels – a 7.5% increase in VAT on tickets, wholesale cost increases and major ticket cancellations due to spiking covid cases. At the same time, the last remaining help from Government is being withdrawn.
“While we welcome the Business Rates discount, we need further measures that can provide a cash injection to all areas of the sector, such as action on VAT. We are calling on the Chancellor to look again at these measures, which would help secure the sector’s recovery and allow our £4.5bn industry to continue boosting the UK economy.”
AIF CEO Paul Reed:
“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. 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.”
CEO Music Venue Trust, Mark Davyd:
“Music Venue Trust warmly welcomes the Business Rates discount, which will maintain the 50% Business Rates for grassroots music venues that the government announced pre-pandemic. With no action for businesses on energy bills, NI liability and the missed opportunity of action on VAT that would support the sector to recover from the Covid crisis, the outcome of the budget is that none of the extraordinary financial pressures being placed on venues have been mitigated or alleviated.
“This budget has failed to respond to inflationary increases from rent, supplies, and services running in excess of 20% across the sector. The government has a itself to supporting business investment, especially research and development. We again ask that the Secretary of State for Culture should enter into meaningful discussions with the live music industry to create R&D tax incentives and direct financial support to achieve that outcome.”