Warning new tax plan will ‘devastate’ London’s live music venues resulting in ticket price hikes and closures

New tax hikes are set to have a “devestating” impact on live music venues and will result in ticket price increases, fewer concerts and the closure of some venues, it has been warned.

Labour’s plans are designed to target Amazon-style warehouses, with the cash raised going to lower the business rates for smaller high street businesses.

But many concert halls will also be forced to pay “millions of pounds” more to the Treasury and the National Arenas Association (NAA) is warning that the costs will have to be pushed onto touring artists and concertgoers.

London is expected to be hit hardest by the proposals and the tax increase could force grassroots venues “already on the edge”, such as Underworld Camden in Prime Minister Sir Keir Starmer’s constituency, to close altogether, the NAA said.

Steve Sayer, senior vice president of the O2 Arena, said the Government was failing to differentiate between music venues and large distribution warehouses that bring little money into the local community.

He told the Standard: “You are talking millions of pounds for some venues, and it’s unfair.

“It’s not particularly well thought through, we would argue. At the heart of the proposals was this intention to support and help smaller high street operators.

“What the Treasury hasn’t taken into account is the significant contribution that large music venues, arenas, big cultural institutions make in terms of sustaining high streets.

“At the O2 our economic impact studies show we helped sustain 6,500 jobs in the Royal Borough of Greenwich, in our local area.

“For every 10,000 fans who attend a large arena gig, a million pounds is spent in the local area.

“So you’ve got this mismatch between a tax which is going to impact large venues significantly, some will be forced to scale back their operations, undoubtedly, I think it will potentially lead to closures.

“It’s really a false economy, because that will mean less shows happening in large arenas, less spending in the local community, and therefore an impact on jobs.”

In a letter to the Treasury, signed by trade body LIVE, the NAA, the Music Venue Trust, British Association of Concert Halls and14 arenas, including the O2 and Wembley, the music industry argued a consultation on the impact of the tax hike should be held ahead of the Chancellor’s upcoming Budget.

“Despite repeated warnings from our sector, the policy as currently designed fails to distinguish between the Amazon-style warehouses it is explicitly intended to target and live music venues,” the letter said.

“This approach ignores the profound economic, social and cultural benefits our venues deliver to communities across the UK…

“Arenas also generate significant tax receipts, including over £100 million in VAT annually from ticket sales and ancillary income sales, as well as other taxes raised in our venues, the wider economic activity in local communities spurred by events at arenas also delivers tax returns to the Treasury.

“Arenas are already operating on very tight margins, and many simply do not have the ability to absorb additional tax pressures. This tax rise could lead to arenas closing, resulting in significant job losses and lost economic activity.”

Jon Collins, CEO of trade body LIVE, said Labour had been “widely supportive” of the live music industry but the policy was “badly thought out”.

He told the Standard: “The way we understand it this was about rebalancing the ‘clicks and bricks’ economy and helping out high street businesses.

“But significantly increasing the business rates on arenas and live music venues would do the opposite. It would be devastating.

“I think London is particularly vulnerable… and it definitely could lead to closures.”