Theatres play a crucial role in connecting communities with the arts. With the power to inspire,...
On Wednesday 7th March, Jeremy Hunt took to the despatch box to deliver the Spring Budget. With 2024 being an election year - when exactly we still do not know - many were poised for ‘brave’ economic policies, tax cuts and vote-winning spending pledges. These, we did not get. Hunt’s - possibly last - budget, was fairly undramatic. Not one to be picked apart and debated for hours at the pub with friends. However, there will have been quite a few people in the theatre community raising a toast yesterday evening (any old excuse eh?).
In a declaration that recognised the contribution of creative industries, especially in driving tourism to the UK, Hunt committed to making the temporary tax reliefs applied to theatres and orchestras introduced during the pandemic, permanent.
Rates are set at 45% for touring productions and 40% for non-touring productions. Whilst this had already been extended to 2025, Hunt used the Spring Budget to keep this fixed long-term and described the act as a ‘lifeline for performing arts across the country.’ But, is it?
It’s important to recognise that this is not an injection of funding but a resolve to maintain tax cuts implemented during the pandemic. Whilst this support has been vital, the industry has been feeling the aftershocks of pandemic closures for far longer than predicted. The cost of living crisis has also presented a significant challenge in bringing audiences back to the theatre and upping headline rates of tax doesn’t make the theatre more affordable for the audience.
That’s not to say ongoing tax relief is not appreciated. It’s taken much uncertainty away from those managing theatre budgets who can now make plans without fear of later having to make cuts. In the media, there’s been an outpouring of support from the performing arts community who were concerned that tax relief measures would be reversed in the spring budget.
“Every theatre is occupied, has been occupied since we came out of COVID. Audience numbers are up. It’s an incredibly strong environment in the West End, and I think that’s absolutely down to that higher rate of tax credit.”
- Elenor Lloyd
President Of Society of London Theatre
It’s not just London either. Theatre Director, Robin Hawkes (@ him - https://www.linkedin.com/in/robin-hawkes-a37a699/) commented, “Today’s news that Theatre Tax Relief has been made permanent is a brilliant boost for theatres here in Manchester, and many touring productions that visit the Palace & Opera House each year. It will be a catalyst for innovation, creativity, and the continued growth of the cultural sector across the country.’’
However, although equally supportive of the move to make tax relief permanent, the ISM (Independent Society Of Musicians) also reflected that the ‘government has missed valuable opportunities to support the arts sector.’ (ISM news article)
They highlighted the failure of the government to deliver the Arts Pupil Premium promised in the 2019 election manifesto and were also disappointed not to see a reduction in VAT on ticket sales.
This is something VisitOne were also sorry not to see. The temporary reduction of VAT on ticket sales for the attractions and performing arts sector was invaluable until the reduced rate was closed in April 2022. Not only was 5% VAT helping theatres recover post-pandemic, but in instances where theatres could pass this cost saving onto the ticket-buyer, it also enabled better access to the arts for a wider audience (pun intended).
Overall though, it has been a good week for the theatres and orchestras. Some much-needed good news for the arts sector.
What did you think about the Spring Budget’s Theatre Tax announcements? Is there any other support for the arts you would have also liked to see? Join the discussion on LinkedIn and let us know your thoughts and opinions.
