LONDON – ‘You can just hop in a bus, drive to Europe and cross all borders to buy decorative antiques. You drive straight through the French customs. It was seamless, ”said Andrew Hirst, a British textile retailer who moved to Ireland with his family in 2018, following Britain’s vote to leave the European Union.
Hirst’s business is still based in London and he said he was worried that the combination of Brexit and the coronavirus pandemic would put an end to his specialist trade.
Britain left the European Union in January 2020, but it followed EU rules until a new bloc-negotiated trade agreement went into effect on 1 January. But British businesses in various sectors, including arts and antiques, are now discovering that trade is not quite as free as they had hoped.
Value-added tax, or VAT – a tax on goods and services normally paid by consumers – is now payable when works of art are imported from the European Union into Britain, and vice versa. Traders at every level of trade also experience unforeseen administrative and transportation costs that harm their profitability.
“I would not buy such an ancient world to Europe again,” Hirst said.
Britain was the world’s number 2 market for art and antiques in 2019, with sales of $ 12.7 billion – 20 percent of the total world market, according to the 2020 Art Basel and UBS art market report. But due to the “unrest with the deployment of Brexit “, the report added, the UK market declined by 9 per cent in 2019, while sales in France, the second largest market in Europe, grew by 7 per cent.
Since January 1, collectors in the European Union, where member states set their own tax rates, are now under VAT bills ranging from 5.5 per cent (France) to 25 per cent (Denmark) on art or collectibles imported from Britain. (Britain charges 5 percent for items coming out of the block.)
“Brexit has made the UK a distant land,” said Andre Gordts, a Belgian collector. He is one of an unknown number of international buyers who quietly moved their collection after the Brexit referendum to avoid VAT payments.
“It just makes things extremely difficult, which improves the trade of bureaucrats, and punishes hard-working artists and honest traders in their galleries,” Gordts said. In 2016, he sold his London apartment and moved permanently to Brussels. “The only way out for galleries in the UK, I think, is to open a branch in the EU”
Ursula Casamonti, the London director of Tornabuoni Art, a leading Italian gallery specializing in modern and contemporary art, with branches in Britain, France and Switzerland, said the retailer now has to pay thousands of euros in administrative costs when moving artworks around. to store exhibitions.
“The administrative, tax, shipping and timing costs for business in the UK have now increased,” she said. “Although we still love the city, we have a negative idea of London as an international center for modern and contemporary art.”
Victor Khureya, chief operating officer of Gander & White, one of Britain’s largest specialist art suppliers, said transport costs had risen “very significantly” since Brexit.
“There is a lot of administration, a lot of documentation and there are a lot of dental problems,” Khureya said.
“This leads to delays that are costly,” he added, noting that a recent consignment was delayed 24 hours by a French customs officer who misunderstood the forms in question.
Khureya said a consignment that cost about £ 250 before Brexit, or about $ 340, now costs almost £ 1,000.
If a work of art is worth thousands of pounds, these shipping costs represent a relatively marginal increase. But the Brexit has also led to punitive increases in the transport of lower-value items.
In January, Thomas Heneage, a longtime London-based retailer of art books, sold an item for £ 75, or about $ 100, to a customer in France, he said in a recent interview. The courier added charges totaling more than $ 60, including a “fuel subsidy”, “Brexit adjustment” and “taxes and duties” that were almost four times higher than they normally asked, he said .
The customer canceled the order, Heneage said.
However, disruption at the top of the auction market appears to be minimal, said Sebastian Fahey, managing director of European operations for Sothebys.
“For the vast majority of buyers and sellers at Sotheby’s, there is no change, after Brexit,” Fahey said, adding that private individuals in the European Union represent only a ‘small minority’ of buyers at its London auctions. He said the new VAT levies on imports of items in the block from Britain “would not be different from the situation they had previously faced when they were in non-EU countries, such as New York or Geneva. , did not buy. “
Some traders and collectors in European Union countries with high taxes on the art trade, such as Germany, see Brexit as an opportunity.
“As far as trade between Germany and the United Kingdom is concerned, it actually has a lot of advantages,” said Johann König, a leading trader in Berlin contemporary art who also has a gallery in London. König pointed out that art bought in Germany can be imported into Britain relatively cheaply, and that pieces bought in Britain are subject to 7% VAT, while Germany charges 19% on domestic transactions.
“I believe that London, in the long run, once a period of adjustment and Covid is over, will retain its importance in the European and global landscape as an important cultural hub,” König said. “We are continuing our activities in the UK and are likely to expand it even more.”
Hirst, the British textile trader now living in Ireland, said he also saw opportunities in Britain after Brexit – as long as he could just stay.
Until December, when the government imposed a stricter closure in England, he flew every week from Cork, Ireland, to London to shop every Friday and Saturday from an open stall at the popular antique market on Portobello Road.
Hirst said he expected thousands of small businesses to open up and create openings for those who survive.
“There will be a lot of bankrupt stock,” Hirst said. ‘I might have to sell contemporary materials, rather than the nice old stuff I bought in Europe.
“It’s adapting or dying.”