UK festivals at “critical” point, without VAT reduction from government

A new report has shown that music festivals across the UK will be reaching a “critical” point if they do not get a VAT reduction from the government.

• READ MORE: Why have so many UK festivals been cancelled or postponed?
  

The report was shared by the Association of Independent Festivals (AIF) – a trade association representing the interests of 101 UK music festivals – and revealed that without intervention and support from parliament, festivals across the UK will be set to be lost.

According to the research, at least 36 festivals were cancelled before they were due to take place in 2023 – namely due to economic pressures between sales and costs. The issues have since continued into 2024, with six more festivals having already been cancelled including Dumfries’ Doonhame Festival, NASS, Nottingham’s Splendour and Barn On The Farm.

Now, the association has launched a new ‘5% For Festivals’ campaign – seeking to inform festival-goers about the problems that music festival promoters have faced over the last five years and encourage them to contact MPs to push for a VAT reduction on tickets.

The campaign also includes a website that outlines the problems promoters are facing and provides music fans with tools to write to their MPs about the VAT reduction. Find out more here.

“We really are at a critical point for the UK’s festival sector. Five years ago, it would have been impossible to imagine that promoters would have to endure something as damaging as the Covid-19 pandemic – but many of them did, without passing the inevitable cost onto the consumer,” said AIF CEO John Rostron.

“To think that, since then, they have had to manage the effects of Brexit, war in Ukraine, inflation and an energy crisis is staggering. That festival-goers were able to enjoy some of the fantastic events they did in 2023 is testament to the resilience and passion of those promoters. But we lost 36 festivals last year, and with six festivals having postponed activity in 2024 or closed the gates for good, we are on track to see well over double the number of casualties this year.”

‌“UK festivals need time to recover and rebuild. They need help from our Government,” he continued. “A reduction in VAT on festival tickets from 20 per cent to five per cent for three years is an evidence-based, simple, sensible remedy that would ease the financial burden on promoters enough for them to return to health. We need this action now.”

The findings by AIF coincide with a recent report shared by NME’s Andrew Trendell, which looked into the increasing decline of festivals across the country and explored the factors involved.

According to Barn On The Farm festival co-manager Oscar Matthews, who spoke to NME, the aftermath of COVID was one of the primary factors that put strain on promoters.

“COVID had a severe impact on so many different sectors on so many different ways, and there needs to be a short-to-mid-term support package in place for festivals and events in terms of a reduction in the VAT rate on ticket sales,” he said.

“The popularity of different genres of music changes all the time, but the two or three years where the young generation who grew up through COVID and weren’t able to access live music in the way that they were before has had this knock-on effect.”

Rostron agreed, telling NME: “The number one reason was economic and financial pressures… It comes from a mixture of rising supply chain costs, and if they weren’t selling as many tickets – even by a small percentage – the difference on the increase in prices and difficulty in terms now in place meant they had to cancel.

“A number of festivals happened where everything looked good on the surface. The customers came, had a good time, the bands played, but the festivals actually lost money. Some of them are in difficulty or might be in difficulty if there isn’t a good wind. That’s very worrying. These festivals are around and don’t appear to be on fire, but maybe they are.”

He continued: “A few big ones like Glastonbury can afford to significantly increase their ticket prices, most of them can’t go up too much because of the cost of living crisis and being affordable.

“They thought they’d come back a year later to bounce back, but they used up all their reserves during COVID, and they now also have to repay their loans and debts taken out over that period on top of rising costs,” he explained. “That’s the incredible COVID legacy. If we’d have come out of COVID and there hadn’t been Brexit, an energy crisis, a war and other things then we could have re-emerged into something more like 2019.”

Alex Lee Thomson, Director of Green House Group – which coordinates strategic digital marketing campaigns for artists and festivals including Barn on the Farm, Rockaway Beach and 2000Trees – also agreed that COVID had prevented a new generation of music fans from getting indoctrinated into festivals, and that organisers might need new ideas to bring them in.

“The festival culture, especially among younger people, has declined,” he said. “In part that’s down to 17 to 20-year-olds losing their swing into the festival experience over lockdown, which used to be inherited culturally from their older friends or family.

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