Here are some key changes we have seen to how the UK art market is operating in a post-Brexit world:
More Expensive for UK Companies to Trade Art in Europe
It has not been more arduous or expensive for UK companies to trade in art in Europe than since the 1970s. With the UK’s art business having lost its key competitive advantage over the EU’s of having the lowest value-added sales taxes in Europe at 5%, long gone are the days when you could save a little money by shipping artworks via the UK to sell onwards to the EU.
European collectors wanting to buy art in the UK will have to pay import VAT according to their own country’s rate. It is no surprise then that France, with the next lowest VAT rate of 5.5% is emerging as the preferred conduit for art sales within the EU.
The good news for art fairs and exhibitions is that temporary admissions procedures still allow for works of art to be temporarily imported and stored in bonded warehouses without any duties or taxes being paid upfront. But London needs to watch this space; it is predicted that within the next decade, Paris could overtake London as the centre of the European market.
Transporting Art Has Become a Headache
Forget about driving a truck of artworks from London to Paris directly to the gallery. A post-Brexit UK means that import duties are now added on goods arriving to the UK from the EU, adding a list of new to-dos, including pro-forma invoices, customs entries, and commodity codes.
Although many galleries already have the infrastructure in place from shipping out of the UK to the US, for example, the new checklists have seen delays in getting works to clients from the UK to the EU and vice versa.
Luckily, the value threshold for paintings requiring export licenses has increased from £132,000 to £180,000 but, without free circulation, the added red tape when transporting art is certainly going to have a negative impact on high-value deals.
Cultural Exchange and International Collaboration More Difficult
Because of the added red tape when transporting artworks across the border, museums and galleries are turning inwards and resurfacing pieces from their own collections. This has not necessarily had a negative impact on the London art scene though, as cultural institutions are finding creative ways to showcase their unique collections, whilst prioritising local artistic talent.
As Luis Raposo, the European president of ICOM, puts it: “Brexit, as with COVID-19, may both contribute to refocusing museums on their own distinctiveness.” However, what does become an issue is the lessening of free movement for cultural producers. Not only are artists now unable to travel to Europe for extended periods without a Visa, but it has also become exponentially more difficult to hire talented specialists in the field from Europe to work in museums and galleries in the UK.
For now, the changes brought on by Brexit seem to have landed the UK art market with more challenges than benefits. But, as demonstrated by its response to the COVID-19 crisis, the art market has the ability to rapidly adapt to unexpected circumstances.
Perhaps the UK’s art business will show the same level of imagination with its ongoing response to Brexit and take it as an opportunity for the UK art market to gain independence and set its own rules surrounding the UK art trade for the first time. The true impact on the nation’s arts sector will only become clear in time.