Written submission from Music Venue Trust (PRO0017)

 

Music Venue Trust

Business and Trade Committee – 2026 Priorities

 

Summary:

 

1.1.             Grassroots music venues (GMVs) are powerful drivers of local economies. They support jobs, attract tourism, and stimulate surrounding businesses from hospitality to retail. Grassroots music venues present thousands of live music events every year in the local community, providing opportunities for artists to build their audience, develop their skills and further their careers. These venues and the programme of events they provide are essential to the future of UK music, being the first step in a talent pipeline that has produced world conquering artists.  

 

1.2.             Of the 366 small music venues Ed Sheeran played while learning his trade, over 150 are now closed. Of the 34 venues Oasis played to launch their careers, only 11 remain. There is a very real crisis in the grassroots of our live music industry and its decreasing access to live music in our towns, cities and communities.  

 

1.3.             The result is a decrease in the total number of live music shows (down 8.3% since 2023) accompanied by an even steeper decline in ticket revenues (down 13.5% since 2023). GMVs are being forced by this decline in touring to decrease their live music offer, running fewer shows at a higher cost.

 

1.4.             GMVs continue to face significant financial challenges, however; in 2024, grassroots music venues had a profit margin of 0.48% with 43.8% of venues in the UK making a loss. Grassroots music venues therefore make a considerable contribution to the economy, whilst often facing financial ruin themselves.

 

1.5.             The combination of financial instability and uncertainty due to changing business rates (clarity on reform is still coming), increasing rents, high VAT, and ongoing threats from new developments with unreliable protection, means grassroots music venues (GMVs) have very little motivation or reason to invest and find it very difficult to plan for their future.

 

1.6.             We have outlined below four policy changes we think the Committee should consider investigating in their priorities that would encourage venues to take more risks, invest in their businesses further and unlock growth:

 

 

Evidence:

 

Business Rates:

 

2.1.             The current Business Rates process for GMVs fails to meet the principles of good tax design. It lacks fairness and efficiency, demonstrated by an administrative process that is complex in calculation and inconsistent. Business Rates present an obstacle to the opening of new venues, and excessive pre-profit taxation on existing venues. Reducing pre-profit taxation in this sector is a key opportunity to increase investment in new and emerging UK talent and we believe should be further investigated by the Committee.

2.2.             Music Venue Trust (MVT) welcomes the Government’s commitment to a full review of Business Rates for the Retail, Hospitality and Leisure sector to be completed and enacted by 1 April 2026. We acknowledge that this is a multi-year process, with a need for ongoing reform, but it is nevertheless a welcome final resolution of the broad sector challenges around Business Rates, which have been a theme of discussions between the RHL sector and Government since 2014.   

2.3.             The immediate impact of cutting rate relief from 75% to 40% in the November Budget has been to create a demand for £7 million in additional premises taxes from a sector that, in 2024, returned an entire gross profit across all 810 such venues in the UK of just £2.5 million. 43.8% of grassroots music venues in the UK made a loss in 2024.  

2.4.             The challenges around business rates and grassroots music venues have been known and accepted for over a decade. We wish to ensure that reform addresses these specific historical issues provoked by a VOA assessment valuation method which is inappropriate for GMVs. Those valuation methods have historically resulted in high and unjustified valuations for GMVs which are significantly in excess of the ability of the businesses to meet, discourage best practice, and unjustifiably remove financial support from venues, artists and promoters.  

2.5.             The inaccuracy of the valuations made of GMVs by the VOA was first pointed out to the VOA in March 2016. This was supported by the then Government in January 2020 who, irrespective of the demands or pleas from any other sector, identified that GMVs are a special case which must be identified as such in any reform of business rates.

2.6.             The then Government announced that from April 2020, GMVs would receive an additional 50% rate relief to reflect this poor valuation process, and that the nature of their use of premises and limitations on their business would be addressed in a future full rate review. Such limitations include licensing restrictions, hours of opening, use of trading and commercial space (you cannot sell a pint in a mosh pit), and the financial burden of workers who do not give financial return to the venue ratepayer (but to an alternative employer e.g. the band).   

2.7.             The recent Business Rates Interim Report, published in September 2025, acknowledges that many stakeholders reported sector-specific concerns about the application of the methodology used to assess particular property types.4 We did not, however, find any specific Government response to this in the report, and we would urge the Government to establish a Fair Maintainable Turnover Valuation method that is specific to GMVs and takes account of the market conditions and practice of running a GMV.  

2.8.             In a letter to Music Venue Trust in October 2025, the Exchequer Secretary to the Treasury noted that, “When it comes to determining the RV of licensed properties, such as pubs, the VOA use the FMT method, which considers the property’s trading potential by looking at what it could realistically generate if it was run by a reasonably efficient operator. That is because there is a direct correlation between the trading potential of a pub and the rent paid. However, as GMVs can be found in a diverse variety of different property types, it would not be appropriate to calculate their RVs via the FMT method.” The Minister did not, however, suggest an alternative method or how reform would address this issue.

2.9.             The Rateable Value system also does not recognise what the building is used for at all and therefore cannot recognise significant issues which are particular to the assessment of GMVs, including hours of trading, use of space, designated commercial space, costs of delivering the cultural programme. These are all elements which would indicate that GMVs need to be treated as a specific category for assessment and valuation.

2.10.          We fully support the Government’s plans for the creative industries and concur with the Government's view of the opportunity laid out in their sector plan, but a poor business bates system is a major obstacle to delivering those ideas. 

2.11.          Unless we can provide some certainty to venues about reducing the levels of pre-profit taxation, through business rates and VAT, so they can focus on the community and cultural work we want them to provide, then any investment by Government is likely to be lost simply trying to meet those financial demands. This atmosphere of it being completely financially unviable to run a GMV needs to be directly tackled with taxation policies that recognise their central role to the Creative Industries Sector Plan. 

2.12.          We are also concerned that this review will simply redistribute the current spread of business rates, rather than actually reduce it for GMVs, including those venues who have a rateable value of over £500,000. This includes well-known and historic venues such as Soul Mama, The Roundhouse, the Royal Albert Hall, and The Underworld, and would severely impact their financial security and long-term viability. The Interim Report acknowledged as much when it stated that the Government will deliver a transitional relief package for the 2026 revaluation.   

2.13.          This new higher multiplier does not distinguish between cultural venues and out-of-town supermarkets, large fulfilment centres, or warehouses. We believe that a distinction on business use for those above the £500,000 threshold will enable this goal to be met, whilst also preserving local nightlife and culture in historic venues. We believe many others in the hospitality industry are making the same argument and support them in this.  

2.14.          We strongly feel that the approach of redistribution is the wrong one. The burden of business rates must be shared between physical and digital businesses - the purpose of “creating a fairer system” - otherwise businesses are being rewarded for not having physical premises. In turn, this will lead to further high street closures. This fundamentally undermines Government plans for creative, local, or high street regeneration as all of these ambitions require physical buildings and businesses to drive them forward.   

2.15.          The system cannot simply be redesigned by redistributing the current burden. It must be overhauled to revitalise our high street, protect our cultural assets, and create a fairer system by ensuring digital businesses are appropriately taxed.   

2.16.          We would urge the Government to work with the Valuation Office Agency to establish a Fair Maintainable Turnover Valuation method that is specific to GMVs and takes account of the market conditions and practice of running a GMV. Such a mechanism is already in place for Pubs and Bars, but the specific characteristics of a GMV have not been recognised within that methodology.  

2.17.          In turn, we encourage the Government, and this Committee, to consider how it might use this opportunity to create multipliers that are specifically designed to encourage activity it wishes to see in different policy areas. Specific multipliers for cultural spaces, for example, would go a long way to support Creative Growth and the regeneration of our High Streets, both key elements of the government’s wider agenda.  

2.18.          This would ensure that GMVs are not simply the beneficiaries of a general consideration (or redistribution) of Business Rates, but that their very special circumstances and conditions are recognised, resulting in revaluations as well as renegotiated rates.  

 

Performing Arts Creative Skills Tax Relief:

 

3.1.             There is currently a widespread shortage of skilled technical and creative staff as well as a lack of ability on the part of grassroots performing venues to afford such staff. Venues have cut staff to keep the doors open, reduced staff hours, and abandoned training, meaning talent pipelines are under threat, especially in regional areas.  We would the like the Committee to consider the feasibility and model of a Performing Arts Creative Skills Tax Relief (PACSTR) to benefit those grassroots creative venues that currently do not qualify for existing creative tax reliefs.

3.2.             The Government has identified that there is a need to ensure that creative talent and opportunity is supported across the country, increasing the productivity and resilience of the creative workforce, and ensuring that skills training is responsive to the needs of the sector. The roles included in the proposed relief are those identified by the sector as having persistent skills gaps and holding back the industry.   

3.3.             From a survey of venue managers by the Local Theatre Touring Alliance, over 60% of venues reported problems in recruiting and retraining skilled technical staff, including marketing and creative professionals. Evidence from the Society of London Theatre and UK Theatre noted that skills shortages were found across most technical roles, especially among sound and lighting technicians (including automation technicians) where major skills shortages exist.1 This included 55% of venues citing finding it hard to fill sound technician roles, 53% lighting technicians, and 39% for stage management.    

3.4.             Venues cited the post-COVID departure of freelance workers, the loss of local training provision, qualifications not providing students with the skills required, reduced local/regional venues with fewer roles, and a lack of formal routes into the profession for early-career technicians. In addition, there is significant opportunity to develop the regional imbalance of grassroots performing arts across the UK with targeted relief. We also know from surveys – such as those above – that venues value experience over prior education or training; so, while it is important that colleges and schools provide the right qualifications, it is even more crucial that people early on in their careers can access local and regional roles to give them the experience for later in their career.   

3.5.             The proposed Performing Arts Creative Skills Tax Relief (PACSTR) would provide targeted financial support by offering: 

 

 

3.6.             This measure would reduce operational costs, incentivise investment in skills, and secure the long-term sustainability of a sector that generated £11.5 billion in 2022 in direct and indirect economic activity. 

3.7.             Current tax reliefs, such as the Theatre Tax Relief, are structured around production and not for fixed venues that host live or theatrical productions. PACSTR addresses this gap and enables a venue to claim for the in-house staff they need to support touring productions and live performances, much like the touring company can already claim for their sound and lighting engineer costs as part of their production. 

3.8.             On average grassroots venues are able to open 4.8 nights per week for a maximum trading period of 4.5 hours, representing just 21.6 hours of commercial activities available in an average week. They are curtailed in this by both the availability of skilled staff and the cost of staff in appropriate roles. Supporting the employment of staff in grassroots venues would stimulate activity, further encouraging nighttime and high-street activity in local communities.  

3.9.             All venues that are deemed to be “grassroots” venues for music, theatre and comedy would be eligible. Generally, these venues will be:  

 

 

3.10.          A full list of eligible venues can be provided by MVT, SOLT, UK Theatre, Data Culture Change, and the Live Comedy Association.   

 

3.11.          What would be the cost? 

3.12.          What would it save/create? 

3.13.          How many companies and projects would claim? 

Shape 

3.14.          Case Studies: Careers Supported by PACSTR 

 

Lighting Engineer – From Hull to the Royal Opera House 

Sound Engineer – Sustaining Local Talent 

Theatre Producer – Scaling Up from Grassroots 

Comedy Producer - Supporting Cultural Expansion 

 

3.15.          PACSTR is a fiscally responsible, targeted intervention that addresses a market failure in skills development while unlocking regional growth and creating jobs in grassroots venues across the country. By supporting grassroots venues—the "R&D labs" of the creative sector—the policy would: 

 
✅ Save and create jobs in a sector at risk (35% of GMVs closed since 2007 and comedy pay stagnating for 30 years). 
✅ Boost local economies (£11.5 billion annual impact). 
✅ Future-proof the UK’s global cultural leadership. 

 

3.16.          We recommend that PACSTR begin as a 3-year pilot, with a review tied to measurable outcomes (jobs created, venues sustained). We envisage the cost to be £30 million/year, with return on investment at £150 million+ annually in broader economic gains. 

 

VAT:

 

4.1.             On VAT, substantive available finances leave the creative economy immediately in the form of VAT on ticketing. Live music is a not-for-profit activity within the Grassroots sector. It is an activity that generates huge longtail returns for the government. Currently, 16.6% of the value of every ticket sold at a Grassroots Music Venue (GMV) event is lost to VAT. Based on 2022 data (latest available) GMVs sold tickets to a total value of £133 million, with a total potential VAT liability of £22.16million. GMVs invested £212 million in the delivery of live music events generating total reclaimable VAT of only £16.9 million. The 20% VAT rate creates only £4.66 million of benefit to the UK Treasury but is an excessive administrative burden.

4.2.             VAT on GMV tickets is a direct taxation on Research and Development, removing £4.66 million from the sector in potential investment into new and emerging talent. The United Kingdom has the highest level of taxation on cultural tickets of any comparable country in the world and the highest rate in Europe.

4.3.             The Government did not make use of cultural exemptions from VAT available to it while a member of the EU and has not acted post-Brexit to take advantage of the opportunity to set appropriate national taxation policy for the sector. This is an opportunity to create a smart and streamlined tax regime that bolsters investment into the UK’s live music industry while cutting red tape.

4.4.             The UK live industry is enjoying a period of extraordinary success. These successful events are built on the work of the grassroots sector, artists, venues and promoters that are not able to sustain their activity and ensure that the sector continues to produce UK talent in the future, but they do not currently financially contribute to the cost of delivering it as they do elsewhere in the world.

4.5.             We would urge the Government to reduce VAT on cultural ticketing in Grassroots Music Venues to 0% and reduce VAT on cultural ticketing in the live music industry to the European average (5-7%) provided that it is allied to an agreed comparable financial investment programme that supports the grassroots of the industry. Such changes would enable GMVs to reduce their pre-profit taxation and better plan for their future and invest in their businesses.

 

Agent of Change:

 

5.1.             On threats from new developments, we believe that making the Agent of Change principle statutory would give grassroots music venues, developers, residents, and local authorities, certainty and therefore unlock growth for venues in the long-term.

5.2.             The Agent of Change principle says that the person or business responsible for the change is responsible for managing the impact of the change. This means that an apartment block to be built near an established live music venue would have to pay for soundproofing, while a live music venue opening in a residential area would be responsible for the costs. A resident who moves next door to a music venue would, in law, be assessed as having made that decision understanding that there's going to be some music noise, and a music venue that buys a new PA would be expected to carry out tests to make sure its noise emissions don't increase.

5.3.             MVT is supportive of new residential developments, and the Government’s house building targets, and indeed supports speeding up this process while ensuring residents have high-quality developments and venues are protected which would improve their ability to plan for the long-term.

5.4.             When Agent of Change guidance is not followed, poorly sound-proofed residential developments are built in close proximity to grassroots music venues, many of whom have been carrying out their activity for years. This then results in inevitable noise complaints because developers have not followed Agent of Change guidance with requisite sound-proofing or sound testing, or not making residents aware of a nearby GMV. This then results in a continued - and often antagonistic - process between developers, venues, residents, and councils because there is no statutory process to follow. 

5.5.             Putting Agent of Change in legislation will considerably shorten the planning process because it empowers Local Authorities to have something specific and enforceable to go back to developers with when their plans do not consider music venues. The Agent of Change will not stop developers putting in badly-considered applications. But it will enable Local Authorities to cut down the length of time debating whether measures included by the developer are adequate enough to meet the Agent of Change guidance currently in the NPPF.

5.6.             To use Scotland as an example: when MVT puts in an objection to a planning application in Scotland, the objection is two paragraphs long; one refers to the national legislation that includes the Agent of Change principle, and one details the impact of omitting this principle. When the Planning Committee receives this objection, because Agent of Change is statutory, they go straight back to the developer to ask them to change the plans to fit the legislation, considerably speeding up the process and benefitting both residents and music venues.

5.7.             In England currently, in 2024, venues came into Music Venue Trust’s Emergency Response Service (ERS) 42 times because they were affected by planning applications. This was a marked increase from 2023 when we had 23 cases in the ERS. 

5.8.             In 65% of 36 cases analysed, Agent of Change is not mentioned in the planning application by the developer. In 37% of the cases the venue doesn’t appear in the noise impact assessment and is not named or referenced. Sometimes the same venue has been in the service multiple times for different applications or separate phases of the same development, and sometimes a single development affected multiple venues. 

5.9.             MVT placed direct representations 30 times. Some of those applications are still awaiting decisions. We are disappointed that there are so many cases with a noise impact assessment where a venue is not even named, and these are only the cases we know about and have analysed this year.

5.10.          If MVT had been able to refer to legislation in the first objection, local authorities would be able to go straight back to the developer to ask them to ensure measures met the law, rather than an ongoing and antagonistic back and forth. 

5.11.          Legislation will therefore shorten the process and meet the Government’s target of speeding up house building. It will also enable GMVs to plan for the long-term knowing they have statutory principles to refer back to when developers change and enhance their area. 

Contact:

Sophie Brownlee, Associate Director:

 

 

Music Venue Trust