Finance

The UK’s share of the global art market fell to a historic low in 2021, according to the Art Basel and UBS Global Art Market Report.

The UK’s $11.3bn share equated to 17% of the global market, 3% less than the year before.

The US recorded the largest market ($28bn), while the Chinese market replaced the UK as second largest in the world ($13.4bn).

The report attributes the decline in part to Brexit and the continued imposition of VAT on art imports. 

“Some domestic EU art trade has been transferred outside of the UK, boosting markets such as France and Germany,” it reads.

Chairman of the British Art Market Federation (BAMF) Anthony Browne says the report “did not make for easy reading from the UK's perspective”.

“[The UK’s] failure to take advantage of the opportunities offered by Brexit and remove the barrier of import VAT [has] put us at a disadvantage on every level”.

Plans to revert VAT on ticket sales to pre-pandemic levels will be “hugely damaging” for the music industry.

UK Music Chief Executive Jamie Njoku-Goodwin has urged Chancellor Rishi Sunak to scrap an anticipated 7.5% hike on live event ticket sales expected in next week's 'mini-Budget'. 

A return to 20% would see the UK’s VAT on tickets - already one of the highest in Europe - far surpass levels set in Spain (10%), Germany (7%) and Belgium (6%), the association says.

Promoters and music industry chiefs are concerned it will force rising in ticket prices, which Njoku-Goodwin said would "leave music fans facing a cost of gigging crisis”.

“Dumping the planned VAT hike would help keep ticket prices down for fans and help music businesses pay down debts they built up during the pandemic, generate thousands of new jobs and nurture new talent,” he added.

Nightlife businesses have experienced a 26% rise in their operating costs in the past year.

The Night Time Industries Association (NTIA) survey reveals the ongoing effects of the pandemic, with businesses on average operating at 68.9% of their pre-pandemic trading levels.

Further cost increases are expected in April, with national living wage, national insurance, VAT and business rates all scheduled to rise.

NTIA CEO Michael Kill said many businesses will be forced to pass cost increases on to customers or risk going bust.

“These statistics show just how bleak things remain for our sector.

“I would now, even at this late stage, urge the Chancellor to postpone all the tax increases to give some perfectly viable night time economy businesses a fighting chance of survival.”
 

Edinburgh has committed to £4.7m of culture funding for 2022/23, £2m of it for Edinburgh International Festival.

Recognising the difficulties posed by Covid-19, the City of Edinburgh Council has extended its three-year funding agreement to four years. 

The Edinburgh Multicultural Festival, launched three years ago, has been added to the council's list of strategic partners, putting it on a more stable footing. It will receive £43,000. 

The agreement also includes support for the Edinburgh Jazz and Blues Festival (£100,000), Imaginate children's festival (£100,000), Edinburgh International Book Festival (£50,000), and Edinburgh Art Festival (£20,000).

Councillor Donald Wilson, Culture and Communities Convener, said cultural organisations responded to the pandemic "with determination and innovation" and reaffirmed the council's commitment to supporting the sector.

Income tax on Culture Recovery Fund and other emergency grants is due next week - a shock to some following mixed messages from the Government.

Ministers intially said the grants would not be taxable, and HMRC appeared to confirm this after arts professionals questioned an email from Arts Council England suggesting otherwise.

The revenue department later backtracked, adding to the confusion.

The final line from HMRC below:

"Payments made from Arts Council England’s Emergency Response Fund fall into the taxable category if made for the purpose of replacing lost revenue of the claimants.  

"This is similar to the treatment of Self Employment Income Support Scheme payments and other Covid grants which have been made with the purpose of supporting businesses and jobs.”