Brexit and the art market (ctd.)
July 2 2022
Picture: Apollo
In 2008 the UK art market was almost as large as America's - the UK had 34% of the global market, the US 35%. Now, however, the UK's share has fallen to 17%. What's happened? Many things, but predictably Brexit has been a major impact since 2016. What can be done? In Apollo, Jane Morris looks at the continuing impact of Brexit on the shrinking UK market, and concludes that some urgent action is required:
Experts say the UK could reduce the rate of import VAT on art to zero, in line with Hong Kong and New York: it is administratively simple and would flag a determination to smooth trade. Flawed European legislation, such as the artist’s resale right and importation of cultural goods rules, could be revisited and improved. Art businesses could be included in government plans for freeports, from which they are currently and inexplicably excluded. It could even be made easier for major collectors to bring the artworks they already own into their UK homes, or exempt certain art transactions from capital gains tax using tax breaks similar to the ‘like-kind’ schemes in the United States.
All of which would certainly help. But as regular readers of AHN will know, they were all on the wish list of art market Brexiters back in 2016, who looked at many of the things which frustrated them about the UK art market, and thought Europe was to blame. But the government took no action on things like the artist's resale right, because it would have implemented it anyway, seeing more votes (or rather, headlines) by appealing to artists rather than art dealers. And if an import Vat cut hasn't happened yet, I'm afraid it is unlikely to happen now. In a cost of living crisis, which government is going to cut the price of paintings, over the price of food?
The simple fact is, the art market doesn't register high enough on the government's radar. We know it wasn't even on the radar when the government began negotiating the Brexit deal back in 2017. And more recently, the decision to exclude art from those new freeports ministers are so keen to shout about was deliberate - because they didn't want to be accused of benefiting rich collectors storing art in tax shelters.
So I'm afraid we'll see the UK art market continue to suffer from Brexit, in a slow, death-by-a-thousand-cuts way, just like the rest of the UK economy. Meanwhile, we will see France take a greater share of the European market, while the big modern and contemporary sales will increasingly coalesce around Asia and the US. I'm sorry to be so gloomy about it, but I see no other outcome.
