With both imports and exports plummeting post-Brexit, Britain’s share of the global art market has fallen to its lowest point in a decade.
Last year, the UK’s share of the worldwide art market fell by 3 per cent, to 17 per cent – the lowest mark in a decade. Experts have warned that intervention is necessary to stop Brexit regulations leave London and its art market on the outside, looking in.
The alarm is a result of the latest figures from HM Revenue and Customs. Released in the 2022 Art Basel/UBS Global Art Market report, they reveal that the value of art imports into the UK was $2.1bn in 2020, down by one third on 2019, and fell by another fifth last year. This left them at almost half the value they were in 2019.
New Brexit rules have changed the way British businesses must conduct trade, with VAT now implemented on goods coming into the UK, and increased bureaucracy on goods going both ways.
Pierre Valentin, an art lawyer, spoke to The Art Newspaper about the situation. “The obligation to pay import VAT when moving art from the EU to the UK and the additional paperwork are considerable deterrents,” he said. “Many European collectors have left the UK. The pound sterling has lost some of its value, resulting in sellers of more important works selling in New York rather than in London.”
It’s not just dealers moving West to the United States, which has held the largest global share of the art market for more than a decade and registered 43 per cent in 2021. Britain and China have jostled for second place during that time, and China is now in the silver medal position with 20 per cent of the market share. That lead over the UK looks set to only grow.
Hong Kong is seeing more and more business reaping the benefits from no tax on art imports as well as no wealth, gift, estate or capital gains tax. Especially for high-end, fine art deals, sellers have been willing to overlook Covid restrictions and democratic crackdowns to prioritise their profit.
The city has also been announced as the site for Christie’s new Asia headquarters, scheduled to open in Hong Kong in 2024, with the building designed by Zaha Hadid. In July last year, when the plans were announced, $1 billion had already been spent by Christie.
Fellow auction house Phillips will also be relocating its head Asia offices to Hong Kong, moving to the city’s West Kowloon Cultural District this autumn. According to the Art Basel/UBS report, at least 25 new auction businesses have opened in China since the start of 2020, while 30 new galleries were launched in 2021.
During that same time, a Christie’s spokeswoman acknowledged “a drop off” in consignments from EU countries to the auction house’s London headquarters. Sotheby’s, however, said consignments from EU countries were at their highest levels since 2018, though import statistics to the UK were “not readily available.”