UK Music, the collective voice of the UK music industry, has urged Chancellor Jeremy Hunt to slash VAT in the Budget to throw the sector a "vital lifeline" and help save closure-threatened venues.

UK Music Interim Chief Executive Tom Kiehl called on the Chancellor to use his Budget on March 6 to cut the current 20% VAT rate on tickets to 10% in a boost for consumers, music professionals and venues.

The call to cut VAT is among the recommendations that UK Music has made to the Government in its Budget submission, which outlines the support the sector needs to grow.

At present, UK gig-goers must pay 20% VAT on their tickets - almost double the EU average (10.3%) and around triple the rate in countries like Belgium (6%) and Germany (7%).

The 20% rate is the third highest rate of cultural ticketing in Europe. Music lovers pay more tax on UK tickets than anywhere else in Europe, bar Denmark and Lithuania.  

The calls come amid mounting fears for the future of some music venues, which are facing an unprecedented cash squeeze due to soaring energy bills, the cost-of-living crisis and rising labour costs.

Around 125 grassroots music venues were lost in 2023, according to the Music Venue Trust (MVT) charity. Among the high-profile closures was Bath venue Moles, which helped launch the careers of Ed Sheeran, Oasis and Radiohead.

UK Music Interim Chief Executive Tom Kiehl said:
"We urgently need to see some action from the Chancellor in the Budget to support the UK music industry at what is an immensely tough time for many venues and for those working in our sector.

"Cutting VAT on tickets to 10% would be a vital lifeline and could mean the difference between saving and losing some of our most loved music venues, which are key parts of many local economies and communities.

"Reducing the tax burden will help boost investment at grassroots level and give local venues and economies across the UK a much needed shot in the arm.

"Venues are part of a wide music ecosystem, which needs support in a number of important areas to help the sector grow and thrive."

The UK Music chief also warned that Government action was needed across a range of areas to ensure the sector can grow amid intensifying competition from overseas markets.

Tom Kiehl said: "There are serious concerns about the potential impact that AI could have on music creators and the threat it poses to their income and copyright.

"The music industry's talent pipeline faces an existential crisis unless more music teachers are hired to nurture the next generation of stars.

"The Government should continue and extend its support for music export schemes and tackle the barriers still facing musicians and crew touring parts of the EU.

"We need the Chancellor to further extend Orchestra Tax Relief at its current level to help safeguard the future of our fantastic orchestras.

"The UK has a world-leading music sector. However, it needs action from the Government to ensure it can continue to grow for decades to come."

An estimated 14.4 million "music tourists" travelled to enjoy live music at venues across the UK in 2022, according to UK Music's Here, There and Everywhere report published last year.

Those gig-goers spent a total of £6.6 billion in 2022. The Music Venue Trust has estimated every £10 spent on a live music ticket is worth £17 to the local economy.

The call on the Chancellor for a VAT cut is a key recommendation in UK Music's Manifesto for Music, published in September, which outlines the support the sector needs to help music grow the UK music industry at home and abroad.

The manifesto outlines how the Government should develop a comprehensive music strategy to help the industry grow and take on the growing competition from overseas music markets.

In addition to the call for a VAT cut, the Manifesto for Music sets out five key recommendations:

• Invest millions more in music education and recruit and train an army of new music teachers.

·       Ensure AI supports human artistry through strong copyright standards, clear labelling and record keeping requirements, and contains protections for the personality rights of music makers.

·       Fix the European touring crisis by securing a Cultural Touring Agreement with the EU to help cut red tape and soaring costs.

·       Introduce a tax credit to encourage new UK music production.

·       Secure a fair deal for music lovers by ending rip-off secondary ticketing practices.

UK Music's call for a tax cut comes as the wider hospitality sector is urging the Government to act.

UK Music is also calling on the Government to ensure the human voice is considered as one of the eligible instruments under the orchestral tax relief, thereby making choirs eligible for tax relief.

According to UK Music's figures, music contributed £6.7 billion to the UK economy in 2022 and employed 210,000 people. 

The UK's music industry is the third largest recorded music market in the world and UK music exports were worth £4 billion in 2022. The UK remains one of only three net exporters of music globally and is the second-largest exporter of recorded music after the USA.