Be prepared – Brexit ahead!
What’s the status of Brexit?
Time is running out for the UK and the EU to reach an agreement and avoid an uncoordinated Brexit. The transition period, which began on 31 January 2020, will end on 31 December 2020. It cannot be extended beyond that date. As it currently stands, the UK and the EU are unlikely to reach an agreement by that date. We therefore urge our clients and partners to prepare for a hard Brexit.
What are the consequences?
Here’s what art collectors and other stakeholders in the art world can expect in the new year:
- The UK will leave the Customs Union – This means that shipments between the EU and the UK will require import and export formalities on both ends. For cultural goods this also means that export restrictions will apply for shipments to and from the UK.
- The UK will implement its own VAT rules – This means that any artwork currently in free circulation (VAT paid) will not benefit from free circulation in the EU anymore. If you plan to transfer this artwork back to the EU after the end of the transition period, you will either need to pay VAT again or use a temporary admission procedure (e.g. for exhibitions etc.). This change in VAT rules also means that clients cannot use the UK anymore to import their artworks into free EU circulation at the low rate of 5%. They will need to use other places that remain inside the EU such as France at 5.5%.
Both points will add complexity to any shipment between the UK and the EU and require additional paperwork. Art collectors and stakeholders should therefore plan ahead. You will need more time to prepare these shipments and increase the budget to cover any additional formalities.
How can you prepare?
Here are the main action points that you should take care of now in preparation for Brexit:
- Create an inventory of your artworks currently in the UK (on storage, loan, or consignment) and check their VAT and customs status
- For any item in the UK in free circulation, consider whether the free circulation status will be useful in the future for personal use or as an argument for a future sale in the EU
- Remove any artworks from the UK that you want to keep in free circulation in the EU or consider selling them before Brexit in case their free circulation status increases the artwork’s value
- For artworks in transit that you want to import into free circulation, you need to take advantage of the low import VAT rate in Britain and transfer them to the EU before the end of December
If you are at all concerned by Brexit it is crucial to follow any new political developments as we approach the end of the year.
What can Fine Art Logistics Natural Le Coultre do for you?
We’ve been advising many existing and prospective clients on how best to prepare for the consequences of Brexit on their art collection. We offer flexible solutions for bonded or free circulation storage at our fine art facilities at LE FREEPORT. We also organize regular shipments to and from the UK. This enables us to position your artworks at the right place in anticipation of the end of the transition period.
Get in touch with us to discuss your specific requirements and learn how our team can help you. We will make sure you and your art collection will not be negatively impacted by Brexit.