A levy on tickets sold for arena and stadium shows is being backed by the UK government, while VAT cuts are out the window.

The UK government is addressing an alarming crisis in grassroots music venues (GMVs), with closures accelerating and the live music ecosystem under threat. A report from the Culture, Media, and Sport (CMS) Committee outlines a series of urgent recommendations aimed at stabilising the sector.

Grassroots venues are critical hubs for developing creative and technical talent within the music industry, yet they are disappearing at a rate of two closures per week. Between 2022 and 2023, the number of GMVs dropped from 960 to 835—a 13% decline that resulted in the cancellation of an estimated 30,000 performances and the loss of 4,000 jobs.

Several industry bodies, including Live, Musician’s Union, and the Music Venue Trust (MVT) have called for measures such as a ticket levy on large-scale concerts to be put in place to prevent further closures. Coldplay has pledged to donate 10% of their earnings from their upcoming 2025 UK tour to the MVT, with other band and artists making their own contributions. However, this is purely voluntary and the sporadic nature of such donations does not allow for a steady and sustainable plan for GMVs.

UK government supports ticketing levy

Now, the UK government has expressed its support for the CMS committee’s recommendations for a ticketing levy. “We believe this would be the quickest and most effective mechanism for a small portion of revenues from the biggest shows to be invested in a sustainable grassroots sector. This would create social and economic value not only for the grassroots sector, but also for the health and future success of the UK’s live music ecosystem.”

Live has been preparing for such a levy already, including setting up a charitable organisation to manage the fund – a step which the government also supports. The government’s statement also noted that there is much work to do in order to implement a levy across the sector. This is in reference to the fact that the industry is not unanimously agreed on this measure.

“We want to see a voluntary levy come into effect as soon as possible for concerts in 2025,” the response explained. Appealing to the arenas and stadiums, the statement went on to say, “And in particular the biggest commercial players who will have the biggest impact on the success of an industry-led levy, to act now, and to do so swiftly.”

Live music industry VAT reduction rejected

The CMS Committee had also urged the government to reduce the 20% VAT rate on ticket sales for GMVs, arguing that such a move could provide immediate financial relief. This is to balance the fact that a ticketing levy is more of a long-term plan that offers no immediate financial impact.

However, the government declined to adopt this recommendation, citing fiscal constraints.

It stated that “Using VAT reliefs to redirect economic activity into one area does not necessarily increase economic activity overall, but may only displace it from other areas, particularly when taking into account the need for raising tax revenue elsewhere to fund the relief.” It also suggested that venues explore existing business rates reliefs and funding schemes instead, referencing the fact the government receives “numerous requests for VAT relief from different sectors every year.”

The rejection has been met with disappointment by venue operators and industry figures. Many believe a VAT reduction could have been a lifeline for grassroots spaces already struggling with rising costs and declining revenues.

The VAT rate on ticket sales in the UK is much higher than other parts of Europe, where 10% is generally the norm. During the pandemic, the rate was cut to 5% in the UK, with hopes that it would not be increased to its original percentage. The chair of the CMS committee, Dame Caroline Dinenage MP has responded to the government’s statement, urging it to reconsider its rejection of a VAT cut.

What’s next?

The government’s support for a ticket levy offers a glimmer of hope for grassroots venues, but questions remain about how funds from such a levy should be distributed. While proposals have traditionally centred on supporting venues and promoters, the Music Managers Forum (MMF) and Featured Artists Coalition (FAC) have underscored the importance of including artists as direct beneficiaries of any grassroots fund.

For the levy to truly revitalise the live music ecosystem, it must address the needs of emerging talent as well as the venues that host them. This holistic approach is critical to ensuring the long-term sustainability of grassroots music in the UK. In the short-term, more steps must be taken to prevent further venue closures, and provide financial relief to the struggling grassroots live music industry.