Dealers and Artists Clash in the U.K. as the Battle Over Resale Royalties Heats Up
According to European regulations, since 2006 living artists have been entitled to four percent of the resale value of works worth €1,000 or more each time they are resold by or to an art professional. The percentage of the sale price is set on a sliding scale going down to 0.25 percent for works exceeding €500,000 ($627,000) — and the royalty an artist can earn is capped at €12,500 ($15,690). In January 2012, the ARR in Britain was extended to artists' heirs and relatives within standard terms of copyright.
The extension wasn't well received by art professionals, who fear that this added tax on transactions will drive business out of the U.K. A petition was launched against the measure, and it now features over 1,100 names. Since opting out of the EU directive isn't possible, the signatories are asking for the threshold to be raised to €3,000 and that a survey of the potential loss of business be made in 2014.
Spearheaded by Niall Fairhead from Fairhead Fine Art Limited, the campaign recently broadened with the distribution of 20,000 postcards to be sent to culture secretary Jeremy Hunt. They show a dead British art dealer in a coffin surrounded by effigies representing the U.S., China, and Switzerland drinking champagne. The Intellectual Property Office acknowledged receipt of 800 of these postcards.
"Whilst agreeing that there is an argument for the payment of the ARR on resales for living artists, I cannot understand a requirement for payments to the estates of dead artists," Fairhead stated in an email to ARTINFO UK. "The lion's share of this money will go to the estates of artists like Picasso, Matisse, and Miró. Not only that, but states such as China, America and Switzerland are not afflicted with this hostile EU legislation and are so happy to see the U.K. put at a competitive disadvantage."
However, for DACS raising the threshold would mean that a large number of artists currently benefiting from the ARR would be excluded, including creative professionals such as photographers and illustrators whose prices are usually lower than fine artists. To counteract Fairhead's latest move, the DACS is calling on all sympathizers to make their voices heard by contacting culture secretary Hunt via Twitter (@Jeremy_Hunt) with the hashtag #resaleright.
Of the artists who have received royalties since 2006, 41 percent wouldn't have earned a penny if the threshold was €3,000. "Resale royalties are a valuable investment in the life blood of the U.K.’s art market at a time when public funding cuts are significantly reducing artists’ incomes," said artist Stuart Semple.
For DACS chief executive Gilane Tawadros, the sums involved are modest but significant. "For the sake of royalty payments of around £32 ($50), raising this threshold will disenfranchise younger and emerging artists as their works resell in the U.K. art market," she said.
Yet for art dealers these costs can add up. There is also confusion as to who pays for the ARR. By law, both seller and buyer are "jointly and severally liable" for the payment. In practice, auction houses charge the buyers but in the case of independent art dealers, who pays depends on the nature of the transaction — and in some cases they may have to foot the bill twice, when buying and when selling. Both Fairhead and DACS agree on this point. "Pressure should be made on auction houses for the charges to be paid by the seller," a DACS spokeswoman told ARTINFO UK.
Despite the squabble, the current legislation is unlikely to change. Intellectual Property Office spokesman Andrew Cope told Fairhead upon receiving the art dealers' postcards that the minister was not prepared to make any form of concession whatsoever. Secretary Hunt, who has been thoroughly compromised by the BSkyB takeover scandal, has other things on his mind.
This article also appears on ARTINFO U.K.