Britain’s smaller music venues will collapse if a business tax relief measure is taken away next year, a charity representing the sector has warned the Chancellor.

The Music Venue Trust (MVT) published an open letter to Jeremy Hunt urging him to extend the existing business rates relief for the retail, hospitality, and leisure sector next year.

The measure means that eligible businesses in the sector can get 75% off their tax bill, capped at £110,000 per firm each year.

But the one-year support is due to expire at the beginning of April 2024.

“The grassroots music sector is in the middle of a full-blown crisis,” the letter reads.

Some 125 venues have shut their doors for live music in the last 12 months, more than 15% of all such spaces in the UK, the MVT said.

It said that 76 of those venues have closed permanently, and the closures have resulted in the loss of 4,000 jobs.

Music venues have been hammered by the Covid-19 lockdowns, soaring energy prices and supply costs, fewer visitors and rising operational costs, and other factors like noise complaints, the MVT found in its annual survey of members.

Venues such as The Unicorn in London, Henry’s Cellar Bar in Edinburgh, and Sunbird Records in Lancashire blamed financial difficulties relating to Covid and the cost-of-living crisis for their closures this year.

Live music has also been affected by a shift toward other entertainment such as live comedy, sports screenings and pub quizzes, or venues using pre-recorded music to reduce costs, it found.

“If you remove the rates relief, you will plunge the entire grassroots sector into the red,” the MVT said.

“Venues must and will close as a result. Even more local communities will lose their access to live music.

“The UK risks producing fewer world-beating artists as a direct result of the decision you make on this issue in your Autumn Statement.”

The retail, hospitality and leisure sector is estimated to have saved around £2.37 billion over the financial year from the current rates relief, according to commercial real estate intelligence firm Altus Group.

MVT said the grassroots music venue sector could see costs increase by £15 million if the tax support is removed.

Meanwhile, bosses of a raft of Britain’s biggest retailers such as Tesco, Marks & Spencer and B&Q earlier this month urged the Chancellor to freeze their property taxes to avoid a hike next year.

Currently, business rates are planned to increase in April 2024 in line with the inflation figure for September. This figure is due to be announced in October and is currently forecast at about 6%.

Across all commercial properties, business rates could go up by about £1.83 billion if September’s inflation rate is similar to the 6.7% Consumer Prices Index (CPI) figure reported in August, Altus Group warned.

A spokesman from the Treasury said: “We recognise the challenges the retail, hospitality and leisure sector faces, which is why we have provided hundreds of billions of pounds of support during the pandemic and since Putin’s invasion of Ukraine, including £13.6 billion in business rates relief which slash bills by 75%, energy bills protection and the Brexit pubs guarantee keeping alcohol duty on pints down.

“We remain committed to delivering on the now-concluded business rates review, which cuts the average bill in every English region and helps level the playing field for high streets and town centres through more frequent property revaluations, caps to rising bills and ensuring that businesses benefit immediately from bill decreases.”