AIF Calls for VAT Reduction to Support Industry Recovery

John Rostron, always open to new friendships. Pic: Jody Hartley

The Association of Independent Festivals has launched a new campaign for a VAT reduction on festival tickets that would save many event promoters from closures in 2024.

The 5% For Festivals campaign is an awareness campaign that seeks to inform festival-goers about the problems that music festival promoters have faced over the last 5 years, encouraging them to contact their MPs to lobby for a much needed VAT reduction on tickets.

Speaking today at the AIF’s Festival Congress, the organisation’s CEO John Rostron warned that the list of UK festivals calling 2024 their final year will continue to grow if decisive action is not taken.

AIF research suggests that at least 36 festivals cancelled before they were due to take place in 2023. The number one reason was the economic pressures between sales and costs.

This trend has continued into 2024, with 6 UK festivals now having announced some form of cancellation already this year: NASS Festival, Leopollooza and Long Division all called time after their 2023 editions. Bluedot and Barn On The Farm will not be taking place this year and hope conditions improve for them to return in 2025. Nozstock The Hidden Valley will make its 2024 edition its last.

The problem stems from the onset of the pandemic, when lockdowns initially prevented festivals from going ahead.

When festivals returned in 2022, they rolled-over tickets with 2019 prices based upon 2019 costs and budgets. Yet, by the time promoters actually delivered the events in 2022, the effects of the pandemic and Brexit had caused costs to increase dramatically – by an average of 30%.

Festivals did not ask audiences to pay more on top of the ticket they had bought in 2019. Many went ahead and made a loss.

Since 2022, the financial pressures caused by the pandemic and Brexit have only been compounded by inflation, the war in Ukraine and the energy crisis.

Without having had a single steady season since the pandemic in which to recover, festivals are under more financial strain than ever.

Temporary support from the UK Government – lowering VAT from 20% to 5% on ticket sales for the next three years – is all that’s needed to give promoters the space they need to rebuild.

AIF’s 5% For Festivals campaign includes a new website that outlines the problems promoters are facing and gives festival-goers tools to write to their MPs about the VAT reduction.

AIF CEO John Rostron said: “We really are at a critical point for the UK’s festival sector. Five years ago, it would have been impossible to imagine that promoters would have to endure something as damaging as the Covid-19 pandemic – but many of them did, without passing the inevitable cost onto the consumer. To think that, since then, they have had to manage the effects of Brexit, war in Ukraine, inflation and an energy crisis is staggering. That festival-goers were able to enjoy some of the fantastic events they did in 2023 is testament to the resilience and passion of those promoters. But we lost 36 festivals last year, and with six festivals having postponed activity in 2024 or closed the gates for good, we are on track to see well over double the number of casualties this year.

“UK festivals need time to recover and rebuild. They need help from our Government. A reduction in VAT on festival tickets from 20% to 5% for three years is an evidence-based, simple, sensible remedy that would ease the financial burden on promoters enough for them to return to health. We need this action now.”