UK exhibitors and distributors have welcomed a decision to temporarily reduce the rate of value-added tax (VAT) on the price of children’s cinema tickets over the summer holidays.
However, some have been caught on the hop by the lack of consultation over the initiative.
The rate of VAT will be reduced from 20% to 5% from June 25 until September 2, as part of ongoing UK government measures to ease the cost-of-living crisis. VAT is a tax added to most goods and services in the UK that is paid by consumers and collected by businesses.
“Great news for cinemas and all those working in film. Delighted that the voice of industry has been heard and recognised. A very good day!” said Clare Binns, managing director of Picturehouse Cinemas and Picturehouse Entertainment.
Clare Reddington, the CEO of the Watershed cinema in Bristol, also welcomed the boost the VAT reduction will give to summer cinemagoing, but also called for longer-term support for cinemas.
“Watershed has a strong family programme and many ways of ensuring we are price inclusive for families,” she told Screen. “We will use this scheme to welcome even more children into the building, including for our forthcoming Aardman 50 season. But [we] would urge the government to think beyond short-term measures to ensure the cultural cinema sector continues to thrive in the face of staggering inflation.”
Questions remain about how the measure will work in practice, whether cinema operators are obliged to pass on the VAT reductions to their customers, what the implications are for distributors, and which children qualify. The assumption is that the VAT reduction will extend to the 12 age rating and below.
Binns would not be drawn on whether the full VAT reduction will come off Picturehouse ticket prices, but said the circuit will “have a very competitive children’s ticket price this summer”.
Phil Clapp, chief executive of the UK Cinema Association, is bullish about the potential boost to the sector.
“While the short notice given to today’s announcement and the way the VAT reduction is in some respects framed will undoubtedly present issues for some operators, in general terms we know that UK cinema operators will welcome this show of support for our sector from the government and the help it will provide for families to enjoy even more of the great line-up of films coming to the big screen over the summer months,” he said.
The move has also been welcomed by the British Film Institute, which operates the BFI Southbank cinemas.
“It means more people can visit the cinema this summer, often the only cultural offer for some communities,” said Harriet Finney, deputy CEO of the BFI. “It couldn’t have come at a better time, with a fantastic lineup of films due to be released. As we hear young people are increasingly valuing and seeking out cinemagoing as their key social activity, we feel confident this additional boost will bring even more young people and families into cinemas big and small all over the UK this summer.”
She said the BFI will be working with the Department of Culture, Media and Sport, and cinemas to ensure audiences can benefit as intended.
The UK Cinema Association is also consulting with its members “to ensure that this measure benefits the widest possible number of children and young people”.
Clapp expressed his confidence that, given the “spirit of the way the discount is framed, and with our longer-term ask of permanent reduction on VAT for all cinema tickets in mind, most will do so, albeit that it will be a company-by-company decision”.
Binns confirmed Picturehouse is “currently reducing tickets for children…[but] even for cinemas that aren’t able to reduce their ticket prices, this will be a big relief for them in terms of how they run business”.
She described the VAT reduction as “a first step”.
“Clearly, it would be great if this could continue, but I am just delighted we have this opportunity, and I am not going to make any complaints about it whatsoever. If there are further initiatives, that will be wonderful, but I think the Treasury has listened to what the industry has said.”
Major family releases this summer include Warner Bros’ Supergirl (June 26), Universal Pictures’ Minions And Monsters (July 6), Walt Disney Pictures’ Moana (July 10), Sony Pictures’ Spider-Man: Brand New Day (July 31), Paramount Pictures’ Paw Patrol: The Dino Movie (August 7) and Vertigo Releasing’s 10th anniversary re-release of The Hunt For The Wilderpeople (August 7).
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