The Impact of Brexit on the Art Market
Brexit has impacted on a variety of industry sectors around the world and the art market is no exception. Britain has the third largest art market in the world with more than 7,800 British art and antique businesses and a 65% share of the EU’s art and antiques market.
It’s no surprise that London is regarded as the capital of the European art market. As a result, it’s unlikely that following the final exit from the EU the UK art market will change overnight, yet there will be unavoidable repercussions.
One of the biggest repercussions will be in terms of funding. EU funding supplies countless galleries, museums and even individual artists up and down the country. Anthony Gormley’s Angel of the North was funded by EU money – an irony considering the leave campaigners projected their slogans onto it. While many argue that the money we will now save on EU membership can be delivered back into sectors such as art, it is not guaranteed that this will be the case. After all, the government doesn’t have the best track record of funding the arts.
EU legislation could also seriously affect the UK art market. Artists are currently subject to the Artist’s Resale Right (ARR), which entitles creators of original works of art to a royalty every time one of their works is sold for more than €1000, and is also paid to heirs 70 years after the artist’s death. Leaving the EU, there is no way of knowing if this will continue to be upheld or if it will be repealed. Although popular with artists, there was a mixed reception to the legislation across the rest of the industry, many of whom would be happy to see it repealed.
Brexit will also affect the art market with regards to VAT. Britain currently has the lowest import VAT tax in Europe of 5%, though following Brexit there is concern that this will change to be brought in line with the import VAT tax for the rest of the world at 20%. This is a significant increase. Regardless of whether the VAT changes or not, the lead times and costs of importing works to and from non-EU countries can still be detrimental to exhibition plans and gallery growth. To see creativity hindered purely because of logistics issues would be a tragedy.
There does appear to be a high level of optimism within the art market, however, particularly at the higher end. This could be because at times of financial instability, which Brexit has induced, many people often turn to the art market with the view of artwork as investment that is less likely to depreciate. Christie’s 250th Anniversary auction “Defining British Art” went ahead with success, even selling Henry Moore’s Reclining Figure: Festival for a record £24.7 million.
Also, following the collapse of the pound against the dollar, more American and Asian buyers are seeking to buy British art or from British dealers. Yet, with the pound so low, less people are likely to be selling in the UK which could lead to supply drying up in the face of demand.
Until the final decisions and agreements are made between the UK and the EU, nothing is certain in terms of economy and trade. Yet optimism remains and is worth continuing to push through the UK art market, such as Sotheby’s statement that it would “continue to thrive in and adapt to whatever environment Brexit brings.”