The country has decided to leave the EU. What might this mean for the arts? The Government is obviously going to have hugely competing priorities, but it is important that the art market now comes together to ensure their voice is heard.
The immediate economic aftermath will clearly have a significant impact on all aspects of the art market for some time, including on the current auction sales, as well as consignments to future sales in the next few months.
Our art law specialists consider the possible longer term impact of the result on the art market, in terms of museum and arts funding, the future of the Artist’s Resale Rights, possible changes to export licenses, and to import VAT. There is significant potential to achieve meaningful reform to maintain and enhance the UK’s competitive advantage in the art market.
Becky Shaw, a solicitor from Boodle Hatfield’s art law team, said: “EU funding for the arts runs into millions of pounds a year, and has contributed to many important projects. Whilst the UK government will continue to support the arts, it is not unreasonable to expect a complete reassessment of how the arts in the UK are to be funded in the longer term.”
Artist’s Resale Rights
Artist’s Resale Rights (ARR) may now come under the spotlight. Supporters of ARR describe it as the most significant new right for visual artists in recent times, giving artists an ongoing stake in the value of their work. Its critics argue, however, that ARR puts London at a disadvantage to its competitors – such as New York and Hong Kong – that do not levy ARR on sales.
Tim Maxwell, a partner at Boodle Hatfield, said: “It would not surprise me if those in the art trade now push for a renegotiation of ARR to better compete with New York and Hong Kong. Artists themselves are likely to oppose changes to ARR that could see their royalties reduced.”
The current export license regime was introduced in 1993 by an EU regulation, replacing the UK’s previous licensing regime, and many important artworks and artefacts have been ‘saved for the nation’ through the export licensing system.
“Critics have long seen the regime as an unwelcome administrative burden and additional cost,” says Becky. “They also point to the fact that the rules vary greatly in different EU countries causing difficulties for galleries and buyers. This may be an opportunity for reform.”
VAT import duty
Tim says: “VAT import duty can be a headache for many UK art dealers, galleries and auction houses. Works imported to the UK from outside the EU are liable to a 5% import VAT charge, whereas works imported from the EU are exempt from import VAT. Calls to abolish import VAT altogether may now become louder in an attempt to encourage more of the international market to move to London particularly from other EU countries.”