“EUROPE certainly shouldn’t be creating new burdens,” said Chancellor George Osborne as he dismissed plans for a financial transaction tax on the City as “a bullet aimed at the heart of London”.
Why does it have the potential to be so damaging?
"The ideas of a tax on mobile financial transactions that did
not include America or China would be economic suicide for Britain
and for Europe," Mr Osborne told the Evening Standard.
"The EU should be coming forward with new ideas to promote growth,
not undermine it."
Fantastic, at last the message has got through! Presumably Mr
Osborne is preparing a statement, even as I write, announcing a
last-minute U-turn on plans to allow the potentially ruinous
extension of that other EU-imposed transaction tax, the Artist's
Just as the City of London enjoys pre-eminence on the global
financial stage, so London's art market enjoys pre-eminence on the
European stage, sharing global billing alongside New York and
China, neither of whom have any plans to introduce the Resale
Come January 1 it won't just be living artists who benefit every
time a work is resold above €1000; the estates of those from
qualifying countries who have been dead for less than 70 years will
also suddenly be charging four per cent on the sale price. This
list of newly eligible artists will include Picasso, Matisse,
Bacon, Moore, Freud, Lowry and a host of Modern British artists
whose burgeoning print market could really do without this
additional burden in straitened times.
At ATG, we have campaigned vigorously alongside the British Art
Market Federation for years over what we see as an unfair tax that
does little to benefit those for whom it was designed, while having
the potential to seriously damage what is one of Britain's great
commercial success stories.
Counter arguments have been made saying that the limited version
of the Resale Right has done no damage to the market so far, but
actually that is not correct. Since its introduction in 2006 the
world boom and bust in art prices has masked any effect that the
Right might have had, so it is not possible to tell the extent of
its influence on sales.
Whatever came before, however, the extension to the estates of
dead artists is a much more serious threat to the market.
We have rehearsed the arguments time and again, and while
Whitehall have made encouraging and sympathetic sounds, when it has
actually come to it, the art market is simply not seen as enough of
a priority to upset the European apple cart by facing down a
Compare the meagre resources available to Anthony Browne,
chairman of BAMF, in fighting the rearguard action, to those of the
well-funded collecting agencies with their lobbyists who champion
the Resale Right and there has to be at least some acknowledgement
that the deck was always stacked against the industry. It makes the
victories that have been won - the derogation for six years, for
instance, all the more remarkable.
If, as we fear, the extension of the Resale Right to artists'
estates pushes trade abroad, and away from the EU, the only way
that the Commission will have levelled the playing field across
European markets (one of the directive's aims) is by reducing the
UK's activity to that of the comparatively minor markets of some
Let's just remind ourselves what the Resale Right is and
• It is a levy on the entire commercial transaction
price for works resold after three years of the initial sale at a
price of €1000 or more, which means it is not a tax on just
profits. In fact, as long as the sale is above the €1000 threshold,
the levy is chargeable even if the transaction is made at a
• It is a levy that is charged on every subsequent sale of each
relevant work, in perpetuity.
• It is not a charge related to copyright, which remains an
entirely separate right.
• It is an inalienable right, which means that artists who feel
it is detrimental to their market value by adding additional costs
to transactions - and there are a considerable number who do -
cannot refuse it.
• It is primarily aimed at less well off artists who would
otherwise find making a living more difficult. However, as the
threshold at which works qualify is €1000, young struggling artists
whose work has not yet reached these levels of value get nothing.
However, it also means that the most successful artists get the
lion's share of payouts.
• It is a blight on patronage. Dealers who traditionally took a
risk on new artists, buying up collections of their work and giving
them a lump sum to fund future activity, now tend to take works on
a commission basis only. By doing this, they act as agents for the
artists, so that sales they make on their behalf are the initial
sales, not resales, and so do not qualify for the Resale Right. No
lump sums then, and fewer chances for new artists to make it,
especially as dealers turn to other areas which do not attract the
A minute fraction of artists who the collecting agencies said
would benefit in the UK have earned any Resale Right so far - and
that's according to the collecting agencies' own figures. Yet the
future of a considerable swathe of the British art market is being
put at risk as a result. Dealers, faced with paying the four per
cent at auction, often have to absorb another four per cent cost
when they sell works on to clients as those clients do not want to
pay it themselves. That's eight per cent off the margin of any deal
before considering any other costs.
Barring a last-minute miracle, we are all about to be lumbered.
In which case, the best advice is: prepare now.
By Ivan Macquisten