Source · Select Committees · Culture, Media and Sport Committee
Recommendation 48
48
Rejected
Review the impact of a permanent VAT cut on entry to cultural events.
Recommendation
We recommend that the Government reviews the impact of a permanent cut to VAT on entry to cultural events, including cinema tickets, to identify whether it would support the growth of the creative industries. (Recommendation, Paragraph 174)
Government Response Summary
The government rejects the recommendation to review a permanent cut to VAT on cultural events, stating it has no plans to introduce such a relief 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.