Brexit threat to UK museums (ctd.)

April 4 2017

Image of Brexit threat to UK museums (ctd.)

Picture: UKRG

I've been sent a report by the UK Registrar's Group, giving their view of what Brexit means to the nuts and bolts of organising things like museum exhibitions, and facilitating acquisitions. Registrars are the unsung heroes of the museum world, and toil away with the paperwork and logistics needed to bring a Caravaggio from one side of the world to the other. 

Here is the summary of their report:

The key questions and concerns outlined within this document highlight that there are some very real risks for UK museums and galleries that an EU exit could severely restrict our ability to maintain the level of lending, borrowing and acquiring of artefacts previously enjoyed by the UK public. Many of these factors outlined as they relate to laws and standards, systems and people, are interrelated. Costs, funding and planning resources are all likely to be negatively affected by each of the areas of impact outlined unless these are addressed and action is taken. The major concern of UKRG members with regard to resources is that the likely scenario is that costs will go up and funding will go down. If systems are not introduced (or maintained) for aspects of regulation and licensing currently based in EU law, then this could have a severe and limiting impact on the movement of cultural property. The result will have a detrimental effect on the UK public (reduced exhibitions), as well as the public purse (many institutions may struggle to absorb costs and resource requirements).

We hope that UK government will consider the movement of cultural property (and the corresponding movement of collections specialists concerned with its care) when assessing the EU exit and take appropriate action to lessen the impact on UK museums and galleries, for the benefit of the UK public, by addressing the areas of concern raised here. 

The matters that the Registrars raise are somewhat technical and complicated, but I'll focus on a couple of examples here. None of the concerns they raise are insurmountable; but they will take a great deal of time and government energy to resolve, and the fear is that ministers will have their mind on matters other than museum exhibitions over the next two years. 

The first example relates to import Vat, which I have mentioned on AHN a few times in relation to Brexit and the art market. A brief recap: currently, if you buy a picture within the EU, there is no duty payable. If you buy one from outside the EU, 5% Vat is payable when you bring it into the UK. The registrars are concerned about what will happen if this 5% is extended to pictures acquired across Europe. And they also note that the mechanism by which UK museums can avoid paying 5% Vat on pictures acquired from outside the EU is itself underpinned in EU law:

Currently VAT is not paid for exhibition goods but 5% is paid on acquisitions for non-EU works of art. If in the future this applies to all works from the EU, VAT would need to be paid for them to be in free circulation/home use resulting in a severe impact on budgets and an increased administrative burden. The Museums and Galleries Relief administered by the National Import Reliefs Unit (NIRU), which allows museums to import goods from outside the EU without paying duty and VAT, is provided for by European Union legislation, so under the proposed "repeal act" could cease to operate upon exiting the EU. 

Therefore, both UK museums and the UK art market will be pressing the government to abolish the 5% import Vat on all works of art brought into the EU. If this is not done, there will be significant extra costs for museums, and a significantly detrimental impact on the art market. I can't myself see the government, cash-strapped as it will be, prioritising a tax break for the art market. But we'll have to wait and see. The fix for the National Import Reliefs Unit should presumably be an easy one - Parliament can simply import the relevant EU law into UK law. But again, it's a question of whether this issue will be enough of a priority for ministers to act on.

The second area of concern I'd like to highlight for now is that of export licensing. At the moment, museums can apply for general licences to move a number of artefacts in to countries in Europe. Will this continue to be the case after Brexit? The Registrars note:

If there is an increase in licensing requirements as a result of the EU exit, this is likely to have a wide-reaching negative impact on resources. For example if there is a requirement for submission of import and export declarations for every shipment in and out of the UK, this will have a severe impact on our ability to lend and borrow (one National institution reported that 70% of the gallery's shipments are EU based). 

Since it has been clear for a while that the UK"s export licensing system will be reviewed, I'd imagine these matters are already under active consideration. But again, we must hope that the government is prepared to put all the necessary resources into devising and planning the new systems required. Otherwise it will be some years before everything is working smoothly.

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