The Music Venue Trust, the organisation which lobbies to protect UK grassroots music venues, has issued a stark warning in the wake of last week's UK Government budget, which included a cut to the tax relief granted to grassroots venues.
Currently, such venues benefit from 75% business rate relief, but this is being reduced to 40%. The Trust say that the additional tax burden across the sector far exceeds potential profit and that many venues are subsequently at risk.
In 2022, The MVT reported that the entire sector returned a profit margin of just 0.2%, which amounted to £1 million in cash terms on a total turnover of £500 million, and that removing the rates relief would plunge the entire grassroots sector into the red. Now that relief has been reduced.
"Despite extensive briefing to HM Treasury, Department of Culture, Media and Sport and Department for Business and Trade about the negative economic, social and cultural impacts of the removal of the 75% business rate relief for Grassroots Music Venues, the Government has today announced that business rate relief will reduce to 40% from April 1st, 2025." reads a statement from the MVT. "The immediate impact is to create a demand for £7 million in additional premises taxes from a sector that, in 2023, returned an entire gross profit across all 830 such venues in the UK of just £2.9 million. 43% of Grassroots Music Venues in the UK made a loss in 2023.
"Over 350 Grassroots Music Venues are now placed at immediate risk of closure, representing the potential loss of more than 12,000 jobs, over £250 million in economic activity and the loss of over 75,000 live music events. Simultaneously with announcing this new tax demand, the Government acknowledged the faults and inequities inherent in the business rate system, promising to deliver a new lower rate of taxes on physical, hospitality and leisure premises in April 2026.
"The challenges around business rates and Grassroots Music Venues have been known and accepted for over a decade. Changes in April 2026 are to be welcomed, but will be of no use for the hundreds of music venues that are now likely to be lost before this challenge is finally met with a full, long-overdue reform.
The MVT goes on to list three possible solutions.
- The Government could think again and act upon the extensive data it has received about the impact of unfair and unreasonable premises tax demands and restore the 75% rate relief for Grassroots Music Venues.
- The Government could create an emergency fund of a maximum of £7 million and allow venues facing the imminent threat of closure to draw down from this fund sufficient funding to meet the new tax demand.
- Every Grassroots Music Venue in the country could install a temporary business rate levy of 50 pence applied to every ticket sold and used directly to meet the £7 million demand. This levy would need to be applied until the new business rate system is installed, predicted by the Government to be on April 1st, 2026.
Bands including Coldplay and Enter Shikari have made contributions to the MVT campaign, with the former donating 10% of UK tour profits to the cause, and the latter adding a £1 ticket levvy to all their arena show bookings.
"It doesn’t bother me that there might not be another Coldplay," frontman Chris Martin told the NME last month, "but it does bother me that there might not be acts that are free to start on the bottom rung and work all the way up – so that by the time they get to stadiums, they are really good. You can’t just jump into that.”
"With all of the artists that are playing stadiums next year, it’s no coincidence that all of them started in a van, driving around and playing pubs: Oasis, Coldplay, Ed Sheeran, the truth is all there. Taylor Swift has probably played more than anyone in tiny Nashville venues and county fairs."
The MVT has called upon fans to write to their local MP to protest the rise in business rates.
