The music industry is calling on the Government for tax breaks similar to those given to pharmaceutical companies to encourage investment in research and development.
BPI, the industry body which represents hundreds of UK record labels including the British arms of EMI, Universal Music and Warner Music, has put forward the submission.
The Government has introduced a tax credit scheme for research and development (R&D), benefiting companies such as those in the drugs industry, but not those in music. Yet the recording industry spends £200m, or 17 per cent of its annual turnover, developing new music every year, said BPI's executive chairman, Peter Jamieson. That is more than the R&D spend of the aerospace, defence and car industries and puts music on a par with the pharmaceutical sector.
Talent scouts, known as A&R men, scour pubs and clubs hunting for acts, such as Oasis and the Kaiser Chiefs, that have the potential to sell millions of albums. "Tax breaks on A&R would represent a significant, practical step that the Government could take to help the music industry," Mr Jamieson said.
Record labels assume "significant risk" by developing unknown performers, he said. "Not every act taken on by a record company will become a huge success. The £200m-plus that UK labels invest annually in music results in a substantial return for the economy in terms of tax alone. Music investors, therefore, deserve a tax concession like many other industries."
BPI said £2bn was spent on recorded music last year, generating £300m in VAT revenues.Reuse content