7th October 2015
Most people who have purchased items from overseas sellers are aware that in some cases the item will be liable to customs duty and import VAT. While works of art are not necessarily viewed as 'products' by artists or collectors they are still subject to the same customs duty and import VAT legislation.
Amount of duty payable
There are 2 key factors that determine the amount of duty payable on any work of art imported into the UK. These factors are:
- the classification as set out by HMRC of the work of art
- the value of a work of art.
HMRC and art classification
The classification system devised by HMRC is specific to the type of artwork, its age, and its provenance.
How a piece is classified determines the rate of duty payable, the rate can vary from zero to 13.9% of the value.
Some items are classified as duty free, this includes:
- antiques over a century old
- original paintings, sculptures and engravings.
Artworks that are mass-produced, such as reproductions and prints, even if created and signed by an artist, are still subject to duty.
How a work of art is valued can be a difficult process, more so for artworks that are rarely sold on the open market. Examples of this type of artwork include 'old masters' or works by very high profile contemporary artists who are not prolific.
The primary method for valuing art for duty payable purposes is to consider the sale prices of similar works.
It should be noted that if the value of a work of art when sold is more or less than the value determined for duty then the amount of duty payable will alter. This can result in an additional payment or a refund of duty previously paid based on the duty value.
Some artworks can benefit from duty relief schemes such as the temporary admission scheme. If you are importing artworks for an exhibition they are subject to duty and VAT relief as long as they are exported within 2 years.
The importer or a third party such as a freight forwarder can apply for this.
Whether your artwork is eligible can be ascertained by checking HMRC import and export notice 200 online.
Eligibility for duty relief
Artworks can be eligible for duty relief if they fulfil specific criteria:
- artworks are sent directly to the location where they are going to be shown
- artworks are not for sale
- the National Import Reliefs Unit has approved your gallery or museum
- you keep an up to date record of the artworks.
VAT on imported artworks
VAT is payable at an effective rate of 5% on some imported works of art.
However, there are some exceptions that are zero-rated:
- antiques over 100 years old
- objects and artworks of special historical or cultural significance
certain artworks imported to be parts of an exhibition. These are subject to stringent conditions including importing by named galleries, museums and establishments, and objects must be of special historical, scientific or cultural interest.
The maze of regulations attached to duty and VAT payable on art is tricky to navigate and it is sensible to contact an expert for advice in order to reduce the risks of high pay-outs.
If you are looking for advice on duty and VAT on art, talk to us today about what we can do for you and your gallery or collection.
For more information and to arrange a free initial consultation please contact: