Will Theatres Pass VAT Cut on to Customers???

Following Chancellor Alistair Darling’s announcement of a 13 month 2.5% reduction of VAT rates, which came into effect on Monday (1 December 2008), theatre producers have been faced with the decision of whether to pass the price cuts onto their audiences.

So far, several high-profile producers have been quick to react by announcing instant rate changes. For example, Andrew Lloyd Webber‘s Really Useful Group have agreed to pass on the rate cut to the nearest 50p at all their theatres – which include the Palladium, current home of The Sound of Music, the Adelphi (Joseph and the Amazing Technicolor Dreamcoat) and Her Majesty’s (The Phantom of the Opera).

Other producers who have so far agreed to a price cut include David Ian, who last week announced that Grease at the Piccadilly Theatre would be reducing ticket prices “down to the nearest logical price-break” with immediate effect. Mamma Mia! at the Prince of Wales has also announced it is reducing prices in the wake of the Chancellor’s announcement.

Dance powerhouse Sadler’s Wells takes the prize for the most generous price cut so far, announcing a 15% reduction on all tickets to its Christmas show, Matthew Bourne’s Edward Scissorhands. Speaking about the decision, Sadler’s Wells chief executive Alistair Spalding said: “For Sadler’s Wells, which has a commitment to providing affordable tickets, it makes much more sense to give a substantial reduction on our biggest show of the year … When people come to Sadler’s Wells, our local economy is boosted. Local restaurants are more busy. They look at our schedule and some restaurants don’t open when we don’t have a show on.” However, despite the short-term cuts, shows at the north London venue in the new year will be kept at the prices as advertised in the new season brochure, which was printed before the pre-Budget report.