A large number of British music venues will struggle to survive if a planned hike in business tax rates goes ahead, warns umbrella organization UK Music.
The trade body’s chief executive Michael Dugher is urging the British government to reconsider plans to increase business rates by 4 percent in 2018 and instead to work with the music industry to help safeguard its future.
“The margins that many music businesses operate within means that even the slightest increase in costs can create a significant challenge,” wrote Dugher in a letter to Chancellor of the Exchequer Philip Hammond, ahead of next week’s budget announcement.
Business rates are taxes paid on non-residential properties in the U.K., such as shops, offices, live music venues and recording studios, calculated on a building’s market rent value.
The rates are set each year by the government (based on figures from the Office for National Statistics) and are presently due to rise by 3.9 percent — equivalent to around £1 billion ($1.4 billion) — in April 2018.
If that increase goes ahead, many grassroots venues throughout the U.K. will be forced to close, said Dugher, pointing to the “woefully unjust” tax rises that music companies have already received in 2017.
According to UK Music research, The Lexington, a 200-capacity venue in London, saw its business rates jump by 118 percent in 2017. In contrast, Arsenal football club’s 60,000-capacity Emirates Stadium received a 7 percent cut.
Other small venues in the U.K. have experienced tax hikes of between 20 and 70 percent this year, with British arenas also seeing large rises, including a 141 percent increase for London’s The O2 arena.
Record labels, publishers and recording studios are also affected by any climb in business rates, with UK Music calculating that London’s Abbey Road and Air Studios both saw their “rateable value” rocket by over 30 percent this year.
“The Chancellor must rethink these changes which are woefully unjust and could have a potentially catastrophic impact on some music venues and recording studios,” stated Dugher.
He went on to say that the Chancellor “should use his Budget to make sure the venues and studios that gave artists like Adele, The Beatles and Oasis their big break are not put under threat because of soaring rate bills.”
According to the Music Venue Trust, 35 percent of grassroots music venues across the U.K. have closed since 2007, with London hit particularly hard by increases to rents, business rates and licensing restrictions. Famous venues that have closed their doors in the past decade include The Marquee, Astoria, 12 Bar Club and Madame Jojo’s.