Vat For Non-Uk Artists In Addition To Uk Exhibition Organisers

This ship provides an introduction to recent changes inward Value Added Tax as well as VAT registration for both 

• artists living exterior the Britain who desire to demo as well as sell their fine art inward the UK; and 
• those selling fine art past times overseas artists inward the UK i.e. the managers of fine art galleries as well as fine art fairs, the Executive Committees of Art Societies as well as the organisers of Art Competitions.

Unsurprisingly, in that location are real many people who are non aware of the changes.  Hence this post.

I desire to emphasise that if y'all autumn into whatever of the higher upward categories y'all involve professional person advice. I used to move a professional person adviser hence I know plenty to know when something is of import but I'm at nowadays retired from that component subdivision of my life as well as am emphatically non offering professional person advice inward this post. Not to the lowest degree because simply next the trail of announcements as well as novel publications on the HMRC site is mind-numbing!

Anyway, below I have got a become at explaining what the province of affairs is.

View of a past times Threadneedle Prize exhibition at the Mall Galleries
This twelvemonth the Threadneedle hopes to encourage to a greater extent than entries from European artists.

Recent changes inward VAT inward the UK

If you're an creative soul intending to demo move inward the Britain - or y'all are an fine art monastic tell or fine art contest intending to demo as well as sell artworks past times artists non resident inward the Britain y'all involve to move aware that the rules relating to Value Added Tax have got changed

The bottom draw is that:

• in monastic tell to sell fine art inward the UK, an creative soul who does non alive inward the Britain as well as has no recognised as well as proper work organisation base of operations here must register for Britain VAT

• there is no turnover threshold for an creative soul who does non alive inward the UK. They must register for VAT if they desire to provide ane move of fine art to a trunk based inward the UK

• by implication those selling fine art on behalf of artists resident exterior the Britain must include VAT on the sale as well as provide a VAT receipt to the buyer (This is non a work if y'all are making sales via a conventional gallery or a gallery that does fine art fairs - but this does have got major implications for fine art societies as well as fine art competitions)

• The registration for VAT must be EITHER the earliest appointment that you brand taxable supplies (i.e. artwork) hither OR you human face to brand taxable supplies hither inside the side past times side xxx days

• in monastic tell to sell move past times artists non living inward the Britain a director of an fine art gallery or fine art fair as well as the organiser of an opened upward exhibition or fine art contest should inquire an international creative soul to provide a VAT number earlier their move tin move brought into the country

• VAT is charged on fine art imported into the UK.

As it happens I'm an accountant past times profession but I stopped keeping upward amongst the changes inward taxation police pull a long fourth dimension ago! (I'm retired). What I do know is it's never a practiced thought to larn on the incorrect side of Customs & Excise when it comes to VAT!

I found out nearly the changes when I spotted an advice greenback equally component subdivision of the notes for artists applying to demo at the Summer Exhibition of the Royal Academy of Art.

It looks innocuous - but it's non - see VAT Information (International Artists)(PDF)

I read it through, realised the implications as well as similar a shot contacted the Mall Galleries equally I know a number of the exhibitions held in that location have got artwork past times international artists. I advised them to brand certainly their taxation accountants took a real closed human face at the recent changes inward VAT as well as how this affects those selling fine art as well as artists living exterior the UK

As a resultant their Terms as well as Conditions for artists submitting move for exhibitions at nowadays includes the next (I've emboldened the NEW conditions).

6. SUBMISSIONS

6.1 If y'all are non usually resident inward the UK, y'all must have got a Britain VAT registration number earlier your work(s) tin move submitted. You must provide your Britain VAT number when y'all submit.

Artists without a Britain residence (known equally 'NETPs' - non-established taxable persons) tin respect farther details on 'NETP' status as well as how to register for VAT at www.hmrc.gov.uk, (HM Revenue & Customs Reference: Notice 700/1, Mar 2014), nether the heading 'Should I move registered for VAT?'. Please note, the registration procedure tin accept upward to iv weeks. Please address whatever questions y'all may have got to the VAT Helpline on tel. no. 0845 010 9000 or, if your telephone band is from exterior the UK, +44 2920501 261.

HM Revenue & Customs Reference: Notice 700/1, Mar 2014

This is a link to HM Revenue & Customs Reference: Notice 700/1, Mar 2014 otherwise known as  Should I move registered for VAT? (Acrobat PDF, 320KB)

Below I highlight closed to of the key parts relevant to artists living overseas as well as trying to sell fine art inward the UK - via fine art galleries, fine art monastic tell exhibitions as well as fine art competitions

That agency this is also relevant to the managers of fine art galleries as well as fine art fairs, the Executive Committees of Art Societies as well as the organisers of Art Competitions.

So what does this mean?

1.2 What’s changed?
We have got made changes to the Apr 2010 edition to reflect:

• the introduction of a novel online scheme for registering for VAT

• the removal of the VAT registration threshold for non-established taxable persons

The removal of the VAT threshold relates to a courtroom case. The resultant of this agency that solely businesses established inward a Member State tin do goodness from its domestic VAT registration threshold. Everybody else doing work organisation inward taxable supplies must register for VAT.

So what's a "non-established taxable person" aka NETP?

In layman's damage - inward relation to fine art - this is an creative soul who lives abroad, who does non have got a house of work organisation inward the Britain as well as who sells their artwork (i.e. taxable supplies) inward the Britain from fourth dimension to time.

The of import betoken is that all artists living exterior the Britain who don't have got a base of operations hither as well as who are selling fine art inward the Britain inward 2014 should have got registered for VAT earlier they made the supplies.

Here's the definition according to DMBM530120 - Debt as well as render pursuit: VAT: liability for payment: Non-Established Taxable Persons (NETPs)

Definition of NETP

A non-established taxable soul who is:

• not usually resident inward the UK
• does non have got a house of work organisation inward the UK
• is non incorporated nether Britain police pull but,

• makes taxable supplies inward the UK

NETPs may register for VAT inward whatever of the next ways

• directly amongst Aberdeen (050 traders)
• via a Britain taxation representative or,
• via a Britain agent.

The novel VAT regulations have got a whole department devoted to it (section 9)

9. Non-established taxable persons (NETPs): basic information

9.1 What is an NETP?

An NETP is whatever soul who is non usually resident inward the UK, does non have got a Britain institution and, inward the instance of a company, is non incorporated here.

9.2 What is a Britain establishment?

A Britain institution exists if:

• the house where essential direction decisions are made as well as the business’s key management is carried out is inward the UK

and/or

• the work organisation has a permanent physical presence amongst the human as well as technical resources to brand or have taxable supplies inward the UK

We would usually consider a fellowship which is incorporated inward the Britain to have got an institution hither equally long equally it is able to have work organisation supplies at its registered office.

9.3 When must an NETP register for VAT inward the UK?

From 1 Dec 2012, if y'all brand whatever taxable supplies (see paragraph 2.3) inward the UK, y'all must register for VAT here, as well as work organisation human relationship for whatever Britain VAT to HMRC.

What the novel Regulations province (my bold caps) is that

If

• you are a non-established taxable soul (see department 9), and
• you brand whatever taxable supplies inward the UK

you MUST register for VAT

In other words, if y'all desire to demo ane move of fine art inward the Britain but don't alive here, y'all MUST register for VAT.

The removal of the threshold is real important.  In number it creates an uncompetitive province of affairs betwixt artists based inward the Britain as well as those who are based exterior the UK. There is no gratis motility of goods which appears to move opposite to what the European Union is nearly amongst the gratis marketplace for European Union countries. So there's going to move closed to lobbying on this number as well as when that happens I'll enhance this over again on this blog.

[For artists living inward the UK:

• Your VAT taxable turnover is the full of sales as well as certainly other supplies y'all brand that are discipline to VAT, including supplies that are zero-rated. If y'all sell goods or services that are exempt from VAT they're non discipline to VAT as well as hence they're non component subdivision of your VAT taxable turnover.
• the threshold for the value of the taxable supplies is at nowadays GBP81,000. When supplies top this figure inward the previous 12 months, an creative soul must register for VAT. ]

When to register to Britain VAT

This webpage explains When to register for Britain VAT. It covers

• Who tin as well as can't register for VAT
• You're doing work organisation inward the UK, or intend to start
• You provide goods to the Britain from abroad, or intend to start
• You provide goods or services from the Britain to other countries
• Voluntary registration
• Calculating your VAT taxable turnover
• Do non avoid registering for VAT past times artificially separating work organisation activities
• More useful links

Interestingly this guidance appears to propose that registration for VAT is optional - but ONLY if y'all are supplying to customers who aren't registered for VAT as well as don't have got to move registered for VAT.

You provide goods to the Britain from abroad, or intend to start

You may involve to register for VAT, or y'all may move able to select to register voluntarily, if y'all are doing whatever of the next kinds of work organisation inward the UK:

• Supplying as well as delivering goods from closed to other European Union province to non VAT-registered customers inward the UK. If y'all sell as well as deliver goods (or adapt for their delivery) from closed to other European Union province to customers inward the Britain who aren't registered for VAT as well as don't have got to move registered, this is known equally distance selling. Common examples are postal service monastic tell as well as Internet sales. If the value of your distance sales inward the calendar twelvemonth from 1 Jan goes over the distance selling threshold, currently £70,000, y'all must register for Britain VAT. You tin also register voluntarily, if y'all are trading below the threshold or y'all intend to starting fourth dimension trading.

Finally - the most helpful as well as clearest guidance came inward Revenue & Customs Brief 31/12 Removal of the VAT registration threshold for businesses which are non established inward the UK
This states

If y'all don't alive inward the Britain or your house of work organisation isn't inward the UK

From 1 Dec 2012, if y'all don't have got a work organisation or fixed institution here, the Britain VAT registration threshold volition no longer apply to you.

Your registration appointment volition move the earliest appointment that

• you brand taxable supplies here
• you human face to brand taxable supplies hither inside the side past times side xxx days

You must register equally a Non-Established Taxable Person (NETP). If you're doing this past times post, y'all tin download the application shape VAT 1.

Get shape VAT 1 to register equally a NETP

If y'all know that y'all volition have got to register for VAT inward the Britain when the rules change, y'all may desire to register inward advance. You do this past times applying for registration inward the commons way but requesting a afterward registration date. You volition move registered for VAT from your chosen appointment if HMRC have your asking inside 3 months of that date. For example, if y'all know y'all volition move liable to register from 1 Dec 2012, HMRC volition register y'all amongst number from that appointment if they have your asking on or after 2 September.

Find out to a greater extent than nearly registering for VAT if y'all don't have got a house of work organisation inward the UK

Read to a greater extent than nearly the VAT registration threshold for NETPs inward Revenue & Customs Brief 31/12 

So in that location y'all go. It's nearly equally clear equally mud - but it does affair as well as those probable to move affected actually do involve to larn proper professional person advice equally to their best course of teaching of action.

Do move aware that if y'all register for VAT y'all as well as hence involve to consummate their VAT forms - which agency y'all as well as hence involve to meticulous amongst your paperwork as well as accounting records!

PS I'm withal unclear just what the implications are for fine art societies or other organisations selling fine art for an international creative soul - but I'm trying to respect out.  I suspect the answer rather depends on the nature of the contractual human relationship as well as what your damage as well as weather condition say.

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