TaxPersonal TaxVAT treatment is a work of art

VAT treatment is a work of art

The government is to continue to press hard for special VAT treatment for works of art in a bid to preserve the pre-eminent position of the London art market.

The pledge to actively seek support for tax breaks from other member states through qualified majority voting was given in the Lords by government spokesman Lord Haskel. It aims to protect the rights of artists such as Damien Hirst, whose work (above) was sold for #71,900 at Christie’s last month.

Lord Haskel also signalled Labour’s decision to oppose a droit de suite – allowance of continued financial rights for artists on future sales – as proposed by the European Commission. Dealers fear business would flee to Geneva and New York as a result.

Lord Haskel said the commission was committed to re-examining the impact of the seventh VAT directive on the competitiveness of the EC art market compared with the art markets of third countries. He said a Department of Trade and Industry study of the ‘worst-case scenario’ indicated UK dealers and auctioneers could lose up to #68m in fees and 5,000 jobs.

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