There was mixed news for the arts, heritage and cultural sector in the recent Spring Budget, but certainly some positives to take away.
One highlight is the news that the government will set permanent higher rates of tax reliefs for theatres, orchestras, museums and galleries to further strengthen the UK’s cultural sector. Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR) and Museums and Galleries Exhibitions Tax Relief (MGETR) will be permanently set at 40% (for non-touring productions) and 45% (for touring productions and all orchestra productions) from 1 April 2025.
There was also some clarity on Gift Aid. The Digital Markets, Competition and Consumers (DMCC) Bill has received much attention within the charity sector, due to its potential impact on charities’ ability to claim Gift Aid on membership subscriptions. The government has announced that it proposes to amend existing Gift Aid legislation by Statutory Instrument, so that charities can continue to claim Gift Aid whilst complying with the new DMCC protections. According to the Budget, ‘the amendments to the Gift Aid regime will be in place by the time the relevant provisions of the Bill come into force’.
The Spring Budget also confirmed the allocation of £100 million of funding for culture projects (subject to business cases), recognising the important role that culture and pride in place have to play in levelling up. This will support a combination of nationally significant cultural investments such as the British Library North in Leeds, National Railway Museum in York, and National Museums Liverpool.
The abolition of the Furnished Holiday Lets scheme is likely to mean fewer tourists in destinations, which will have a knock-on effect on other businesses in local visitor economies. Some good news is that Alcohol Duty will be frozen until February 2025, but there will be no cap on the increase to the business rates multiplier which will hit hospitality businesses hard in April, at the same time as other cost pressures such as wage bills rise. This is likely to have a much bigger impact on pubs than the alcohol duty freeze.
The VAT threshold will increase from £80k to £90k which may help some small businesses. However there was no movement on reducing VAT in tourism, or on reintroducing tax free shopping for overseas visitors, and very little support for local authorities.
Gordon Morrison, Cultural Enterprises CEO, commented, “Whilst measures such as the permanent setting of higher rates of tax reliefs for many cultural venues are to be welcomed, this budget does little to alleviate deep concerns within the cultural sector regarding the lack of understanding in Whitehall about just how important the sector is for the UK both economically and socially.
“As a sector we need to do all we can to stand on our own two feet and maximise our own income streams if we are to survive and thrive. Cultural Enterprises is committed to investing heavily in the year ahead to provide more support services for our members to help them generate the increased income that will be needed in many cultural venues if they are to weather the current storm.”
For more information on the budget and its impact on our sector please see this excellent piece of analysis from our friends at the Heritage Alliance.
