London is at the heart of the UK fine art sector and the UK is the world’s third largest art market, only behind the US and China. London is home to a number of leading museums, commercial art galleries and hosts a number of international art fairs every year. Art shipping, the art industry’s ‘engine room’, ensures that art is packed, crated, shipped, installed and stored. So how might Brexit impact this important ‘behind the scenes’ industry that keeps the art world going?
As a member of the EU, the UK currently benefits from free movement of goods between EU member states. As such, when importing goods to the UK from another EU country, they are in ‘free EU circulation’, meaning they do not require customs clearance and are not subject to import duties and taxes. With this agreement most likely changing in the next few months, Brexit is expected to bring some challenges for the transport and freight industry, but potentially opportunities too.
A customs bonded warehouse is highly useful for international fine art shippers like us operating between the UK and EU. Artworks can be imported for storage in a customs warehouse without paying import vat upfront at the time of import. Technically these artworks have not entered the UK from a tax point of view. Therefore, in the event of a no deal Brexit in which we are outside the EU customs union, artworks can still be imported into a customs bonded warehouse for storage without a collector or gallery having to pay import VAT upfront. Works can be transferred from bond to temporary import so that they can be displayed in our on-site viewing rooms, again without having to technically pay import VAT upfront.
Calais to Dover has always been a vital route for transporting goods from the mainland to the UK and vice versa. An immediate ramification of Brexit could be major congestion at this crossing. It is important for any shipper to consider how moving to different routes could affect their business. Harwich to Rotterdam in the Netherlands is one popular option that art shippers, such as ourselves, already pursue In the event of delays at Dover / Calais.
Shippers that are authorised to arrange Customs clearances for export and import at their warehouses will be able to minimise the effects of Operation Stack and its successor Operation Brock, where lorries are parked in a queue to go through customs clearance and physical examinations. Customs clearance and checks are arranged at the shipper’s warehouse in lieu of customs clearances and checks at the border. We expect more operators to apply for these authorisations, in order to bypass these ‘lorry-stacking’ initiatives.
Brexit and being outside the Customs union will potentially impact the art shipping sector’s ability to service the UK’s vibrant international art fair circuit landscape due to the need to arrange temporary import on works coming in for exhibition and possible sale. At present, EU exhibitors do not have to arrange temporary import on free EU circulation works coming into the UK for exhibition and possible sale at art fairs. With Brexit, the UK would sit outside the customs union, meaning that artworks coming into the UK will have to come in as temporary imports with a guarantee being lodged with HMRC on the VAT due. In the event of a hard or no deal Brexit, if the government does not put into place mitigating arrangements, less art may be brought into the UK for display and possible sale.
Like all international shipping companies with UK operations, we would welcome more clarity from the government about Brexit. We intend to keep our comprehensive art logistics services running as normal as possible the other side of Brexit Day.
Victor Khureya
About the author
Victor Khureya has been Operations Director at Gander & White UK for the past 15 years. Gander & White Shipping is a leading art logistics provider, working with galleries, museums, interior designers and private clients to carry out full-service storage, shipping and installation services. In his time at Gander & White, Victor has participated in the development and expansion of the company across Europe and the United States. He works closely with HM Revenue & Customs, ensuring that Gander & White is constantly kept aware of developments that may affect the global sector in which his company operates.
