Tax changes announced in the budget could have “devastating, unintended consequences” on live music venues, including widespread closures and job losses, trade bodies have warned.

The bodies, representing nearly 1,000 live music venues, including grassroots sites as well as arenas such as the OVO Wembley Arena, The O2, and Co-op Live, are calling for an urgent rethink on the chancellor’s changes to the business rates system.

If not, they warn that hundreds of venues could close, ticket prices could increase, and thousands could lose their jobs across the country.

Politics latest: Ex-Olympic swimmer nominated for peerages

Business rates, which are a tax on commercial properties in England and Wales, are calculated through a complex formula of the value of the property, assessed by a government agency every three years. That is then combined with a national “multiplier” set by the Treasury, giving a final cash amount.

The chancellor declared in her budget speech that although she is removing the business rates discount for small hospitality businesses, they would benefit from “permanently lower tax rates”. The burden, she said, would instead be shifted onto large companies with big spaces, such as Amazon.

But both small and large companies have seen the assessed values of their properties shoot up, which more than wipes out any discount on the tax rate for small businesses, and will see the bills of arena spaces increase dramatically.

In the letter, coordinated by Live, the trade bodies write that the effect of Rachel Reeves’s changes are “chilling”, saying: “Hundreds of grassroots music venues will close in the coming years as revaluations drive costs up. This will deprive communities of valuable cultural spaces and limit the UK creative sector’s potential. These venues are where artists like Ed Sheeran began their career.

“Ticket prices for consumers attending arena shows will increase as the dramatic rise in arena’s tax costs will likely trickle through to ticket prices, undermining the government’s own efforts to combat the cost of living crisis. Many of these arenas are seeing 100%+ increases in their business rates liability.

“Smaller arenas in towns and cities across the UK will teeter on the edge of closure, potentially resulting in thousands of jobs losses and hollowing out the cultural spaces that keep places thriving.”

They go on to warn that the government will “undermine its own Industrial Strategy and Creative Sector Plan which committed to reducing barriers to growth for live events”, and will also reduce spending in hotels, bars, restaurants and other high street businesses across the country.

To mitigate the impact of the tax changes, they are calling for an immediate 40% discount on business rates for live venues, in line with film studios, as well as “fundamental reform” to the system used to value commercial properties in the UK, and a “rapid inquiry” into how events spaces are valued.

In response, a Treasury spokesperson told Sky News: “With Covid support ending and valuations rising, some music venues may face higher costs – so we have stepped in to cap bills with a £4.3bn support package and by keeping corporation tax at 25% – the lowest rate in the G7.

“For the music sector, we are also relaxing temporary admission rules to cut the cost of bringing in equipment for gigs, providing 40% orchestra tax relief for live concerts, and investing up to £10m to support venues and live music.”

The warning from the live music industry comes after small retail, hospitality and leisure businesses warned of the potential for widespread closures due to the changes to the business rates system.

Sky News reported after the budget that the increase in business rates over the next three years following vast increases in the assessed values of commercial properties has left small retail, hospitality and leisure businesses questioning whether their businesses will be viable beyond April next year.

Analysis by UK Hospitality, the trade body that represents hospitality businesses, has found that over the next three years, the average pub will pay an extra £12,900 in business rates, even with the transitional arrangements, while an average hotel will see its bill soar by £205,200.

Read more: Hospitality pleads for ‘lifeline’

A Treasury spokesperson said their cap for small businesses will see “a typical independent pub pay around £4,800 less next year than they otherwise would have”.

“This comes on top of cutting licensing costs to help more venues offer pavement drinks and al fresco dining, maintaining our cut to alcohol duty on draught pints, and capping corporation tax,” they added.

The Chancellor Rachel Reeves has acknowledged there were “too many leaks” in the run-up to last month’s budget.

The flow of budget content to news organisations was “very damaging”, Ms Reeves told MPs on the Treasury select committee on Wednesday.

“Leaks are unacceptable. The budget had too much speculation. There were too many leaks, and much of those leaks and speculation were inaccurate, very damaging”, she said.

Money blog: Nine-year-old set up Christmas tree business to pay for university

The cost of UK government borrowing briefly spiked after news reports that income taxes would not rise as first expected and Labour would not break its manifesto pledge.

An inquiry into the leaks from the Treasury to members of the media is to take place. But James Bowler, the Treasury’s top official, who was also giving evidence to MPs, would not say the results of it would be published.

Committee chair Dame Meg Hillier asked if the group of MPs could see the full inquiry.

“I’d have to engage with the people in the inquiry about the views on that”, replied Mr Bowler, permanent secretary to the Treasury.

The entire contents of the budget ended up being released 40 minutes early via independent forecasters, the Office for Budget Responsibility (OBR).

A report into this error found the OBR had uploaded documents containing their calculations of budget numbers to a link on the watchdog’s website it had mistakenly believed was inaccessible to the public.

Tax rises ruled out

The chancellor ruled out future revenue-raising measures, including applying capital gains tax to primary residences and changing the state pension triple.

Committee member and former chair Dame Harriet Baldwin had noted that the chancellor’s previous statement to the MPs when she said she would not overhaul council tax and look at road pricing, turned out to be inaccurate.

During the budget, an electric vehicle charge per mile was introduced, as was an additional council tax for those with properties worth £2m or more.

Strategy, the largest Bitcoin treasury company, submitted feedback to index company MSCI on Wednesday about the proposed policy change that would exclude digital asset treasury companies holding 50% or more in crypto on their balance sheets from stock market index inclusion.

Digital asset treasury companies are operating companies that can actively adjust their businesses, according to the letter, which cited Strategy’s Bitcoin-backed credit instruments as an example.

The proposed policy change would bias the MSCI against crypto as an asset class, instead of the index company acting as a neutral arbiter, the letter said.

The MSCI does not exclude other types of businesses that invest in a single asset class, including real estate investment trusts (REITs), oil companies and media portfolios, according to Strategy. The letter said:

“Many financial institutions primarily hold certain types of assets and then package and sell derivatives backed by those assets, like residential mortgage-backed securities.”

The letter also said implementing the change “undermines” US President Donald Trump’s goal of making the United States the global leader in crypto. However, critics argue that including crypto treasury companies in global indexes poses several risks.