Tax Blow To UK Art Market

Britain's 3 billion pound-a-year art market suffered a blow by the EU yesterday when a judge ruled that a higher rate of VAT must be paid on works imported into the United Kingdom to be auctioned. Although the ruling does not yet have the force of law, more than 70 per cent of such judgments are ratified within months by the court. Buyers now pay 5 per cent VAT on both the hammer price and the auctioneer's commission, although this is waived if the work of art is immediately exported outside the EU after the sale. If the ruling becomes law, buyers will still pay 5 per cent VAT on the hammer price but will be liable for 17.5 per cent VAT on the auctioneer's commission - adding a fifth to the purchase price. For the full story - click the title Irish Art