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Brexit: What might it mean for the art market?

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The Brexit debate caught the attention of the art world recently when the Vote Leave Campaign ‘unlawfully’ projected its slogan onto Antony Gormley's iconic Angel of the North statue.  But what consequences might a British exit from the EU have for the art world asks the art law specialists at Boodle Hatfield. 

The firm believes that an exit from the EU could have a widespread impact on the art market, including on museum and arts funding, the future of the Artist’s Resale Rights, possible changes to export licenses, and to import VAT.
 
Funding
 
Becky Shaw, (pictured) a solicitor from art law specialists Boodle Hatfield, says: “EU funding for the arts runs into millions of pounds a year.  EU funding has contributed to many important projects, including Gormley's Angel of the North – something the Vote leave campaign presumably did not realise when they decided to 'unlawfully' use it for their campaign.”
 
Brexit supporters, however, see EU funding as a red-herring, arguing that the democratically-elected UK government should make decisions on the funding of British arts institutions rather than the EU, and pointing to the savings they argue would be made by Britain leaving the EU.  Indeed, an exit from the EU could require a complete reassessment of how the arts in the UK are funded in the future.
 
Artist's Resale Rights
 
Artist’s Resale Rights (ARR), implemented in the UK in 2006, may also come under the spotlight if Britain votes to exit the EU.  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.
 
Shaw says: “While those in the art trade may wish to renegotiate ARR if Britain were to leave the EU in order for the UK to better compete with New York and Hong Kong, artists themselves are likely to oppose changes to ARR that could see their royalties reduced.”
 
Export licenses
 
The current export license regime was introduced in 1993 by an EU regulation, replacing the UK's previous licensing regime.
 
 
 
Many important artworks and artefacts have been ‘saved for the nation’ through the export licensing system, including Jane Austen’s ring and a Van Dyck self-portrait, now hanging in the National Gallery.  
 
“It is unclear if Britain were to leave the EU whether and how the export licensing system might change which could affect the UK's ability to save works for the nation in this way,” says Shaw.  “Its supporters point to the treasures now on display in public institutions which would otherwise have disappeared into private collections.  Critics, however, would welcome the opportunity to try to change the current system, which they see as an unwelcome administrative burden and additional cost. Critics also point to the fact that the rules vary greatly in different EU countries which can cause difficulties for galleries and buyers."
 
“Although Brexit may require a new system to be introduced for works imported into the UK, that may be an improvement on the current system where both UK and EU law applies.”
 
VAT import duty
 
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 per cent import VAT charge, whereas works imported from the EU are exempt from import VAT.
 
There is a temporary import system which allows works to be brought into the UK for a certain period, but dealers complain about the burden of paperwork, as well as the financial limits on the number of works being held on temporary import at any one time.  Some art dealers have suggested that Brexit might provide an opportunity to abolish import VAT altogether which may encourage more of the international market to move to London.
 
Shaw concludes: “With pros and cons on either side, the art market, along with the rest of us, will have to watch this space and then ensure its voice is heard after the vote is determined.”

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