Source · Select Committees · Culture, Media and Sport Committee
Recommendation 47
47
Rejected
Stronger case now exists for assessing VAT cuts across the creative industries.
Recommendation
It is understandable that the exhibition sector seeks a VAT reduction when it faces so many challenges around costs, box office revenue and infrastructure. However, those calls must be considered alongside the regular requests we hear for reduced rates of VAT from across the creative industries, and the Government’s broader economic and policy position. The Government has ignored previous calls to assess the impact of VAT cuts on live music, but now the creative industries are a key pillar of its industrial strategy, it should think again. (Conclusion, Paragraph 173)
Government Response Summary
The government rejects the recommendation, stating it has no plans to introduce a general VAT relief for cultural events, including cinema tickets, due to concerns about complexity, administrative costs, and potential economic displacement.
Government Response
Rejected
HM Government
Rejected
The UK maintains a cultural VAT exemption for admissions charges for certain cultural exhibitions and events. This exemption applies to public bodies (such as local authorities) and other eligible bodies (such as charities) that satisfy certain conditions and exclusively provide performances of a theatrical, musical, or choreographic nature. The purpose of the exemption is to recognise the importance of these types of performances to our communities and culture, and to increase accessibility and take-up by consumers. Whilst the government recognises the economic, social and cultural importance of cinemas, we have no plans to introduce a general VAT relief on entry to cultural events, including cinema tickets. Furthermore, VAT reliefs can add complexity and administrative cost to the tax system and create opportunities for non-compliance. From a broader economic perspective, using VAT reliefs to redirect economic activity into one area does not necessarily increase economic activity overall, but may only displace it from other areas, particularly when taking into account the need for raising tax revenue elsewhere to fund the relief.