Source · Select Committees · Culture, Media and Sport Committee
Recommendation 10
10
Accepted
Ensure future fiscal policy provides long-term certainty for GMVs, tapering any business rates relief reduction.
Recommendation
We welcome the Government’s decision to extend business rates relief for grassroots music venues until the end of the 24/25 billing year. However, while we understand that the conventions around Budget announcements are well-established, this continued uncertainty creates a new cliff-edge for the already precarious grassroots music sector. We recommend that Government should ensure that any future fiscal policy decisions relating to grassroots music venues gives venues certainty and long- term security. If the Treasury intends to end business rates relief for GMVs, the reduction in relief should be tapered in order to avoid an immediate shock to the sector. (Paragraph 64) Public funding
Government Response Summary
The government commits to providing fiscal certainty by introducing permanently lower tax rates for relevant properties from 2026-27, extending RHL relief at 40% for 2025-26, and freezing the small business multiplier for 2025-26.
Government Response
Accepted
HM Government
Accepted
The Government will support economic growth by delivering certainty and stability in fiscal policy-making by: (i) moving to one major fiscal event a year; (ii) committing to hold a Spending Review every two years, setting budgets for a minimum of three years to avoid funding ‘cliff edges’; and (iii) setting five-year capital budgets. This will give departments, families, and businesses the certainty and stability that they need to plan. We are providing certainty to businesses on tax going forwards through the corporate tax roadmap we have published, which confirms the commitment to cap Corporation Tax at 25% - the lowest in the G7 – for the duration of this parliament. The Government is committed to supporting the creative industries, which play a key role in driving economic growth, contributing £124.6bn GVA in 2022 and supporting over 2 million jobs. At the 2024 Autumn Budget, the Chancellor set out plans to transform the business rates system over the parliament. These reforms will provide certainty and support to businesses in the creative industries, and help to address the concerns for grassroots music venues (GMVs) set out in the Committee’s report. Since the COVID-19 pandemic, a one-year retail, hospitality and leisure (RHL) relief has been repeatedly rolled over as a temporary stopgap. However, this has meant uncertainty for businesses about their business rates bills from one year to the next, including for grassroots music venues, and has created a significant fiscal pressure for the Government. The Government has announced that it intends to introduce permanently lower tax rates for RHL properties with Rateable Values below £500,000 from 2026–27. This reform will provide certainty for businesses regarding their bills, addressing one of the report’s key areas of concern for GMVs. This tax cut must be sustainably funded, and, as such, the Government intends to fund this intervention within the business rates system by introducing a new higher multiplier for properties with Rateable Values of £500,000 and above, from 2026–27. To provide support during the period of transition to permanently lower multipliers in 2026–27, the Government has extended RHL relief at 40% for 2025–26. Furthermore, the Government has also announced a freeze to the small business multiplier, which will ensure that GMVs with RVs under £51,000 see no inflationary increase to business rates bills for 2025–26.