Brexit Blues
27 May 2021
What effect has Brexit had on the art and antiques trade?
Colin Gleadell
Colin Gleadell writes on the art market for The Daily Telegraph, Artnet and Art Market Monitor.
George Wolfe (1834-1890), ‘Coming into harbour’, signed, watercolour heightened with white, 10.5 x 15 inches. The location is possibly St Peter Port, Guernsey.
Image courtesy of Newman Fine Art.
When I look at the amount of red tape and form filling that art and antique dealers have to cope with to-day I thank goodness I’m not an art dealer. I’m the guy, after all, who found himself, soon after graduating in history, working in an art gallery in Chelsea. My boss, Andras Kalman, liked my ability to find my way about libraries, and research his lesser-known artists. But if someone had walked into the gallery with a fist full of notes and said ‘I’d like to buy that’ – I wouldn’t have known what to do. I didn’t even know what an invoice was. Now, in addition, I would have to deal with a mountain of bureaucratic forms concerning customs declarations, Import/Export/VAT, and money laundering.
People who think art dealers just swan about the Riviera or the ski slopes of Aspen in search of a rich punter, would only be half right. And since Brexit – only a quarter right. Knowing how new import and export charges apply and what the rates are in each EU country takes some getting used to. There are not only the VAT payments to take care of but the reclaiming. The customs procedures which slow down the shipping process and cost everyone more money, now cost even more because they need special advisers to ensure procedures are followed correctly.
For big businesses, these costs can be managed and absorbed within the sales, just as the increase in auction premiums, which cause resentment at first, are always reluctantly accepted eventually. But for smaller dealers they can have a seriously negative impact.
Writing to the Antique Trade Gazette in March, LAPADA member, Phillip Crosthwaite of Cloverleaf Home Interiors said: ‘What would normally cost us £300 to be delivered from The Netherlands cost us £800. The rigmarole of the paperwork nearly caused me to question my sanity.’
Antiques dealer, Julian Vincent, assessed the new VAT tariffs in Europe were adding 18%-25% to his costs, and that he had lost 75% of his EU business since Brexit. Another dealer confided to me: “I have lost sales because clients, especially in Italy, don’t like filling in so many forms.”
One good thing about COVID, dealers say, is that, apart from making them brush up their digital skills, they have had extra time to get their heads around all the documentation which now comes with the job.
One of the most devastating critiques was delivered by the art historian, dealer and TV presenter, Bendor Grosvenor, to The Art Newspaper saying: “The damage to the UK art trade will be slow, but remorselessly cumulative. And in about ten, or fifteen, years’ time, we’ll find Paris beginning to overtake London as the centre of the European art market.”
Of course, Paris was the centre of not just the European art market but of the world’s market before most of us were born. One can’t blame the French for wanting to reclaim that status. How they have relished the opening of major American gallery branches like David Zwirner, in their capital. Zwirner said that although he had established swanky premises in London pre-Brexit, he now wanted a toe hold in Europe. Ouch!
Robert Walton, ‘A New Plaine & Exact Map of Europe’, c. 1660, published London, 54 x 44cm.
Image courtesy of The Map House.
In the auction business of course, the two largest auction houses in the world are now owned by French businessmen. While London is still far ahead of Paris in public auction sales, analysts have recorded an uptick in the French global market share lately, but not of London’s. Even the relative minnow, Bonhams, is beginning to explore activity in France and has just announced the relocation of its regular Greek art sales to Paris. Because of Brexit, London has also witnessed an exodus of galleries specialising in modern Italian art.
But Sotheby’s managing director for Europe, Sebastian Fahey, downplays the negative effect of Brexit on the UK market. Brexit has made ‘only a little impact’ on Sotheby’s London’s business he says. That is because three quarters of Sotheby’s buyers and sellers are from outside the EU. London sales in the first post Brexit quarter of 2021 were the same as in 2020 (which was, admittedly, not a good year), but preventing a slide mid pandemic and keeping level was still an achievement. There are administrative issues and shipping delays, Fahey acknowledges, but they will ease over time, he says.
Fahey also highlights some advantages to come out of Brexit in that EU registered trade sellers in the UK don’t have to pay their national VAT or VAT on the seller’s commission – which they did before Brexit.
Britain has also declined to apply a new EU law which requires that importers of antiquities have special licenses to prove that such items were legally exported from the country of origin. The new law was far more onerous than the previous one and threatened to close down the whole antiquities trade. But evidence has been produced to discredit one of the driving arguments for the new draconian legislation - repeated assertions that the illegal antiquities trade produces billions of pounds to fund terrorist activity. So, for now, the British antiquities trade maintains the same degree of freedom as in the US. “This puts the UK art market in a more attractive position as an international destination,” said David Dalton, chief executive of the British Chamber of Commerce in Brussels, “particularly in comparison with the EU.”
But those who thought that leaving Europe might result in the abandonment of the Droit de Suite, or Artists Resale Royalty tax, to stimulate the modern and contemporary art markets, were disappointed. Although it only really benefits the most successful artists, the tax has been retained on the general principle that ‘it supports artists,’ said a government spokesperson.
No doubt trade will continue, and Britain will retain its status in the global art market because it is a world financial centre, attracts a huge number of wealthy residents from overseas, and has the largest concentration of expertise anywhere in the world.
But many are still finding it difficult to comprehend how, having left all that bureaucratic EU red tape behind, we have managed to saddle ourselves with even more.
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