[Cocteau 101]

Does anyone know if VAT is payable on original art bought in a UK gallery, some seem to charge others don't.

What's the ruling.

[Cocteau 101]

Anyone? doesn't seem to be covered in the VAT thread.

[andrewd]

Depends on the annual turnover of the gallery. Any business turning over more than £67,000 needs to be registered for and charge VAT.
Any business worth it's keep will register for VAT even if the turnover is lower as despite the pain of administration the business can claim back the VAT on VATable items that it purchases.

[Cocteau 101]

But I've been charged VAT on prints but not original art from one gallery.
However a different gallery is charging VAT on an original piece of art. Is their an answer for the differing practice.

[christoffero]

Hope someone gives a good answer to this today as I'm about to get stung.

[paulypaul]

Pay cash - it's VAT free then....

At least - that's what I expect...


(wanted to put a 'winky smiley' at the end of that but my hatred of them stopped me - I'm sure you get my drift...)

[dmandpenfold]

oooh VAT... my favourite , how's it going cocteau??

Here's some details on VAT, art and galleries which should help;

• andrewd is correct, if the artist turns over more that GBP67,000 per year they must be registered for VAT. Same goes for the Gallery.
  
• It makes no difference if the art work is a print or original, if the artist and gallery are VAT registered VAT must be applied at 17.5%. Only when importing Art from overseas does the special 5% VAT apply. If the imported art is then sold on in the UK by a business that is VAT registered then VAT is still applicable on the sale at 17.5%
  
• If the imported art is sold on by a private individual (not normally VAT registered) then VAT is not payable.
  
• If the artist makes only a modest living out of their work and is not registered for VAT, they may have an agency contract with the gallery, ie the gallery sells their work on a sale or return basis. Under this arrangement no VAT is applicable to the work of art, however the gallery will usually take a commission from the artist for their work, and VAT would be charged on the commission and deducted from the artist's earnings on the work, as the customer you should only see the sale price of the work.
  
• If neither the artist or the gallery turn over more than GBP67,000 per year, they may not be VAT registered in which case you would not pay VAT as the customer
  
• In addition to all this the gallery may choose to be part of the Customs and Revenue Margin Scheme, where VAT is only paid on the difference between the gallery's buy price and the sale price, this is good if VAT was already charged on the original purchase as it avoids double taxation, which is baaaad
  

The other possibility of course is that the price you paid already includes VAT and you did not ask for or get a VAT receipt from the gallery even though you may have been charged VAT in the total price. This is not a problem unless you are VAT registered and are planning to claim the VAT back.

Hope that helps
DM

[Cocteau 101]

Hi DM

Brilliant. That is the most cpmprehensive answer I have seen on the subject.

Thanks again and I appreciate you taking the time to explain.

Cheers

C

[dmandpenfold]

no worries glad to help mate, maybe mr silky could put this thread in amongst the other VAT stuff?