“For a generation the UK has been able to hold its ground in the global art market through a combination of expertise, competitive costs and a comparatively benign regulatory and fiscal environment. Currently the UK is behind the US and just ahead of China in volume of art sales. But its market share is falling say Barnebys and BREXIT may well lead to a loss of its powerful position.
There are signs of snow in the air for the UK art market. The influential art auction search engine, Barnebys, which lists one million objects on any one day with 3,000 auction houses globally, notes that the UK market is falling along with most of the rest of the globe.
Will Britain’s art market survive Brexit? The question and the art market hangs in the balance. The right decisions on facilitating trade may just boost Britain’s position, the wrong decisions will see the global art market becoming a two base hub – New York and Hong Kong – with Britain’s once flourishing art market just another part of Britain’s colourful history.
The US market saw strong growth of 4% in 2016 while other regions declined. The US total share of the art market was $27.3 billion. The Chinese market dropped with sales down 23% to a total of $11 billion, while the UK dropped a staggering 9% to $13.5 billion. The UK still ranks in second place to the US and had a 21% share of the global art market. China was close behind accounting for 19%.
It may be that the overall global market decline has masked any Brexit effect that might have taken place.
Barnebys is increasingly the online art platform chosen by anyone interested in tracking down a work of art, an antique, a design icon for sale in the world’s auction houses. It is often called the Google of the art world.
Because of its massive database of goods moving through the art world it can track trends as few others can and is sensitive to market movements.
Currently the UK enjoys a pre-eminent position in Europe as the place that most of the art market action takes place. This is because it is home to all four of the giant international auction houses – Sotheby’s, Christie’s, Bonhams and Phillips – and most of the major league art galleries have a presence here. New York and Hong Kong are the competition. London is where so many of the wealthy have first or second homes. It is a comfortable place to do business. The City and its financial institutions are on hand to help fund major art purchases, the legal and accounting infrastructure is here to facilitate the setting up of arts trusts, family trusts and other legal and accounting services needed to move art around the world. And everyone speaks English, still the world’s leading trade language.
Will these stunning advantages that London currently enjoys survive the four horsemen of the Brexit Apocalypse? Leaving the Single Market, leaving the Customs Union, ending of Freedom of Movement within the EU and the risk of losing some of its financial services to other European centres hungry for a slice of this action.
Artists Resale Right – ‘Droit de Suite’
Artist’s Resale Right refers to the levy charged on the sale of works done by living artists or those artists who have died within the last 70 years. Currently London is a signatory to this tax, which means that often sellers will go elsewhere, to New York, for example, where they don’t have to pay this tax to artists or the estates of artists. If London is free of the EU and it drops this tax it could benefit the art trade in the UK. Even if it does not go for a wholesale scrapping of ARR, the UK can make important changes, such as reviewing the threshold at which it applies, to make matters better for business.
The UK currently has a discounted import VAT rate of 5%, which is the lowest in the EU, thereby making it the most competitive EU member state when it comes to imports from outside the EU. Obviously, if we leave the EU and customs union, while we can keep the rate, so our own imports won’t be affected, we might lose the advantage of importing art cheaply into the EU to pass on to buyers in other countries. However, tax experts have been advising that when it comes to B2C sales, the UK should be in a better position all round over VAT.
Of much more concern are European Commission proposals to introduce a far more restrictive import licensing system for cultural property, including a whole range of art and collectables. As they stand, these pose a serious threat to the European art market and will undoubtedly affect the UK as an exporter to the EU even if it is no longer a member. Trade associations across Europe are campaigning hard to have these measures either scrapped altogether or at least seriously amended.
Freedom of movement around the EU:
London’s leading art market position in Europe is dependent in large part on the ease with which people from the EU can work in the UK, and vice versa. Most art professionals believe that freedom of movement for those in the art world is the single most important aspect to London’s current dominance.
Besides directly employing more than 40,000 people, the UK art market helps to support a further 100,000 jobs through its expenditure on ancillary services. Art fairs – Frieze, for example, which pulls in thousands of international visitors each October – and auction sales make a cultural as well as commercial contribution to the UK, attracting great works that might not otherwise be seen here.
Freedom of movement really is the BIG one. If there is a massive increase in paperwork and delays at borders because customs can’t cope, that will have a major effect on the UK. This would probably affect the UK’s entrepôt status (a port where goods for import or export can be stored without paying import duties).
On the other hand, the UK’s access to the biggest global markets (US, Hong Kong and Switzerland) should be easier, so it could be a matter of swings and roundabouts, especially as the UK art market is as big as all the rest of the EU put together.”
- To limit the harm done by Brexit, stay in the EU single market
- Three ex-PMs demand Boris Johnson ditches No Deal Brexit threat as poll suggests Tories will lose 4 in 10 voters if he does
- Treasury analysis of effects of Brexit on UK economy: key points
- OPEC+ and the threat of glutted global oil
- What changed for the market while you were sleeping? 12 things to know
- In a spin: Brexit spells trouble for UK vinyl industry
- Investors embark on profit-taking, worried over threats facing the market
- Boris Johnson insists we WILL leave the EU with ‘new deal or no deal – but no delay’ despite Brexit letter claims
- An evening walk down D-St: Market rises for 3rd consecutive day; bank, auto, FMCG top contributors
- Will EU citizens still have the right to work and live in the UK after Brexit?
- POINT OF VIEW: ‘BEF’ reshaping Nigeria visual art
- Mahantesh Sabarad on why FIIs are back in Indian market
Brexit threat to the UK's position in the global art market have 1213 words, post on www.ibtimes.co.uk at March 13, 2018. This is cached page on VietNam Breaking News. If you want remove this page, please contact us.