The UK art market is, for now, weathering the storm after the shock vote to leave the EU in June, say dealers and other art professionals, who stress that London is proving surprisingly resilient. But other leading figures are concerned about the long-term impact and whether the government will prioritise trade concerns following the narrow vote in favour of breaking away from the EU. “In terms of a multicultural, cosmopolitan metropolis, London has no rivals, and it is hard for anyone to see a viable alternative within the EU,” says the art adviser Hugo Nathan, the co-founder of the London-based consultancy Beaumont Nathan. “The general feeling has been that the world isn’t ending,” says Jack Bell, a London dealer specialising in contemporary African art.
Crucially, Christie’s and Sotheby’s both say they have no plans to relocate any part of their operations to the continent. “We will work closely and appropriately with government and other trade bodies in the coming months. Once the political process becomes clearer, we will align our business and operations with any new legislative framework,” a Christie’s spokeswoman says.
But whether the government will secure a good Brexit deal for the UK art market is another matter. “So far there has not been any indication that the UK government thinks the art market is something worth fighting for, which is alarming given just how much give and take there will be in the negotiations to come,” says the Edinburgh-based art historian and dealer Bendor Grosvenor.
“Those who think it will be a case of simply presenting a wish list of demands, as if we will not be competing against other lobbies or interests, are being naive,” he adds. The UK Department for Culture, Media and Sport declined to comment.
The impact on taxes currently regulated by the EU remains to be seen. These include import VAT, which stands at 5% in the UK compared with a minimum of 6% across the EU. The UK will, in theory, have the freedom to reject import tariffs set as one flat rate by the EU, and could end import VAT on art altogether—or it could impose a __more complex system of tariffs and duties, depending on its level of access to the EU single market.
“The [import VAT] tax is actually only paid by dealers when they sell an imported work within the EU. If it is re-exported, as often happens, no tax is paid. But one can only keep works on temporary import for a certain period,” says the London-based dealer and European Old Masters specialist Guy Stair Sainty who considers Brexit "potentially positive".
He argues that the import VAT tax is cumbersome and expensive to administer for the trade, shippers and the HMRC. “If the government does not abolish import VAT, I would have to reconsider remaining in the UK because 95% of my inventory comes from the EU, which means it would have to be bonded or on temporary import,” he says.
The London-based art lawyer Pierre Valentin says, meanwhile, that moving art from the UK to the EU could trigger import VAT when it enters Europe. “If it did, this would discourage EU citizens from buying art in the UK,” he says.
Another piece of contentious legislation, initiated by the EU, is the artist’s resale right. Since 2011, dealers and auctioneers in EU member states, including the UK, must pay the heirs or estates of artists, deceased in the past 70 years, up to 4% of the sale price of works sold for __more than €1,000. Several UK art professionals, who believe the law does little to benefit less advantaged artists, are now hopeful that it will be overhauled, although artists and estates will fight to keep their royalties.
There are also concerns over a potential lack of freedom for artists and gallerists to relocate freely to and from London, Nathan says. He says there is a growing polarity between the primary and secondary art markets: “It could be that while the secondary market thrives, the primary market suffers. Ultimately it is the collectors who drive the market, and it may be that currency fluctuations have the greatest impact on them.”