From January 2012, new legislation gave PPL the right to collect fees for playing music recordings from 
charities that were previously exempt. This is in addition to the fee payable to PRS for Music for playing copyright music. With this in mind, we recommend you read the following detailed information on the licence fees you will have to pay. We have also included some top tips on keeping licence fees as low as possible.
Music licensing bodies
There are two music licensing bodies:
- PPL UK licences the playing of sound recordings with the royalties going to the artists, performers and recording companies.
- PRS for Music licences the public performance of musical compositions with royalties going to the songwriters, composers and music publishers
The change in the law means that in future PPL will license community buildings and will not license the activities that take place within those buildings separately (unless they are commercial activities). Community Matters therefore recommends that community buildings should increase their hire charges to groups to cover the cost of the licences as those groups will no longer require their own licence.
Community Matters PPL Scheme
Some years ago, PPL granted permission to Community Matters to operate a reduced fee scheme for those buildings that have always required a PPL licence. After some discussion, they have agreed that they will extend the scheme until December 2012 for those organisations that are currently part of the scheme. For most members this will be a cheaper option than the standard fee. Current members of the scheme should have by now received a letter from us detailing their options. From January 2013, our scheme will cease and all existing Community Matters PPL Scheme members will be on the standard CB tariff.
No licence required
Most community buildings will require one or both music licences and it is rare that this is not the case. However, community buildings require no music licences if:
- Where no music is played
- Where the ONLY music played is any or all of the following:
- through a jukebox (PRS licence but no PPL licence required)
- at private family functions (weddings, birthdays, christenings etc)
- live performance of music that is out of copyright
- specially purchased copyright-free recorded music or other music not controlled by PRS or PPL
- live performance of copyright music (PRS licence but no PPL licence required). Certain theatrical performances are exempt from PRS licences.
- recorded music that is out of copyright (PPL licence but no PRS licence required)
- recorded music where the group hiring the space has their own PPL licence (no PPL licence required)
- for sacred worship (religious services)
- wedding ceremonies, civil partnership ceremonies, civil ceremonies
- for Medical Music Therapy
- educational use between a student and teacher, in specific circumstances
However, members should be aware that these uses will only be exempt if no other licensable, music related activity takes place within the building. As soon as some licensable activity takes place, then licence fees must be paid on all ‘defined’ income from the above activities. This means hiring charges to religious groups, income from weddings or private family functions, hiring charges to groups that have their own PPL licence and hiring charges to groups that don’t use any music must all have fees paid on them. Those committees that need to increase their hiring charges to cover music licence fees may now need to explain to religious groups, groups with their own licence etc who are hiring their building, that the increase will apply to them as unfortunately the community building does have to pay a licence fee for their particular activities.
Community buildings require no PPL UK licence if only live music is performed, but not recorded music for e.g. CD's, radio and TV. A jukebox is not included as this has its own PPL licence.
Community buildings require no PRS for Music licence if no live music is performed and sound recordings played do not include music still in copyright.
Any music use outside these limited circumstances will mean that one or both licences are required and any income from even the activities listed above is then subject to the licence fee.
Fees
PRS for Music and PPL UK have a joint tariff for community buildings that have an annual income of £50,000 or less.
- The fees will be 1% of defined income to the building, for each of the two collecting bodies
- Where the defined income is less than £10,000, there will be a flat-fee of £42 for the PPL portion of the fee
- The tariff will cover the building and the land surrounding it and any vehicles operated by the organisation.
¹ Community Buildings tariff (tariff CB)
Community buildings for the purposes of this tariff are defined as “Community buildings run by voluntary organisations such as community centres, village/memorial/parochial halls, separate church halls serving the community at large, women's institutes, welfare institutes and comparable premises”.
It doesn’t include the following types of buildings, each of which would require a different tariff:
- charity shops
- buildings used by sports clubs
- buildings run by statutory bodies (including Parish Councils)
Tariff CB only applies to buildings with a maximum ‘defined income’ of £50,000. PRS have said that they will review this limit in 2013 as it hasn’t increased for some years. In practice, PRS have allowed buildings with a higher income to register under tariff CB but they have now told Community Matters that once they have reviewed the limit, they will apply it much more strictly, with transitional arrangements for those above the limit that have nevertheless benefitted from the tariff.
² Defined Income
Defined income is not always the total income of the organisation. The definition used by PPL and PRS is “door takings and similar takings of the host voluntary organisation (the community association or management committee); hiring charges received from hirers of the building (but not the door takings of those hirers if retained by them); subscriptions; and the net contribution from food and bar takings where they accrue to the voluntary organisation”.
It doesn’t include the following types of income:
- Grant income (capital or revenue)
- Gifts, donations, legacies or bequests
- Interest earned on accounts
- VAT
Income in these categories should be deducted from your total income to calculate the amount of your licence fee.
PPL and PRS will verify the calculation of defined income by asking for the organisation’s annual accounts, but have said that they accept them at face value.
Music controlled by PRS and PPL
We asked PRS for a list of music that they control. They told us that it would be impractical to provide it as they represent over 10 million musical works from UK and through reciprocal agreements with similar societies worldwide. If you have any queries about music that you may have purchased as being copyright free you can contact PRS to check the specific situation.
Parish and Neighbourhood Councils running buildings
PRS has now said that they will not budge on allowing Parish Councils that have responsibility for community buildings into their scheme. We previously advised such Councils to make their case to PRS and PPL as we recognise that many such Councils are very similar to Community Associations and often have little income. However, the music licensing bodies have ruled out the possibility of them joining the community buildings tariff.
Contract income
Grant income is exempt and members should deduct any grants from their total annual income before calculating their fees. We have previously advised that where grants have now been replaced by contracts for the same activities, that members should make the case to PRS and PPL that this should also be exempt. PRS have now ruled that contract income that has replaced grant income is not exempt and that organisations should include this income in the calculation of the fee.
They have also clarified that organisations should pay a licence fee on income from other contracts for services that they may win, whether or not these are related to music use. The only exception is for income to the organisation that is not related to their community building, such as a contract for outreach work or other projects they run in addition to managing the building.
Sub-leasing space
PRS has reiterated that where a separate organisation or business has a permanent tenancy agreement with the main organisation for some of the space in their community building, the main organisation can choose to make the separate organisation responsible for their own licencing arrangements as the space is not then their direct responsibility, (even where it’s let to a wholly owned trading company). In this case the main charity would not include any income from rental charges to that organisation within their calculation of the licence fee. PRS have said that if requested, they will licence the building as a whole (including any separate areas) under tariff CB. Members would need to work out the most financially beneficial position.
Don’t forget that you only need to include the net income from bar or food takings so make sure you calculate this first.
Other tariffs
There are a number of other options for organisations who do not wish to take a licence under the community buildings tariff or are above the threshold of £50,000 defined income. These include Tariff GP (General Purposes), Tariff I for Workplaces, and there may be specific charges for concerts (popular or classical), variety shows and theatrical usage. Tariffs LP, LC, V and T. We will include more information about these tariffs on our website.
Street parties
PRS have said that they will not charge for street parties and small community events to celebrate the Queen’s Diamond Jubilee. Their website does not mention other street parties (such as the Big Lunch or to celebrate other events) and the implication is that PRS may charge a fee for these. We could find no reference to either street parties or the Diamond Jubilee celebrations on the PPL UK website. Community Matters would welcome any information from members and others about whether they have been charged a music licence fee for street parties.
To find out more visit www.prsformusic.com/ppljointlicence or call PRS for Music on 0845 140 0090