A business rates support package for pubs and music venues has not been extended to theatres, leading to warnings the sector will suffer job losses and "reduced activity" without targeted relief.
It comes after the government back-pedalled on business rates hikes for pubs and music venues, following concerns the move would severely threaten them. Pubs and music venues have now been promised a 15% discount for two years starting from April, with bills frozen for the following two years.
Theatres, however, were not included in this relief. Society of London Theatre co-chief executive Hannah Essex warned that theatres were still in dire need of support to weather higher business rates.
"Theatre organisations across the UK are under acute financial strain," Essex warned.
"More than one-third reported deficits last year, as sharp increases in energy, materials and staffing costs have outpaced revenue. Many theatres now operate on margins so tight that further cost pressure directly threatens jobs and long-term viability."
Essex noted that hikes to National Insurance tax – another obligatory cost for theatre employers – was adding to the strain.
“Theatres are anchor institutions for town and city centres, driving footfall, employment and local supply chains. For every £1 spent on a theatre ticket, an additional £1.40 is spent in the local economy.
"Yet theatre buildings are costly to maintain, and business models are finely balanced.
"Without proportionate and targeted business rates support, the result will be reduced activity, job losses and weaker local economies."
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Rachel Reeves’ autumn budget kick-started sweeping reforms to the business rates, a tax paid by commercial properties, including theatres.
Rates for standard commercial properties will fall to a lower rate – but that change will be funded by a higher tax rate for the most expensive 1% of properties.
When similar plans were tabled earlier last year, warnings emerged that entertainment businesses in the West End would bear the brunt of the higher rate, with a report suggesting that theatre occupiers in the area could be saddled with an increase of up to 20% to their business rate bills.
Reeves also announced that 75% business rate discounts for small retail, hospitality and leisure businesses would drop to 40%, and would then disappear altogether from April.
The Treasury has been contacted for comment.
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