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Brexit

How Brexit Will Impact the Art Industry - Key Insights from Olyvia Kwok

Published: Wednesday 23 October 2019

Olyvia Kwok is a prominent art collector with over 15 years of experience investing in art all around the world. She became well-known in the art industry at just 22 when she brought a Chinese scroll painting at an auction and later sold it at another auction house, making a hugely impressive return on her investment. Kwok later opened a successful art firm in St James London, and she now offers bespoke art investment services to private individuals and companies.
 
Kwok notes that the art world has evolved significantly over the years into the established industry we see today. The UK has been particularly successful in growing its art market internationally and has kept its ranking as the second-largest art industry in the world behind the United States (US). Access to overseas artistic talent and ease of movement have played a key role in the growth and success of the UK art market. Naturally, this has led many people to question the effect that Brexit will have on the UK art industry. Some people feel that Brexit could have a hugely detrimental effect on the art world and lead to cultural isolation by imposing additional taxes and regulations. Whereas, others including Kwok, view Brexit as an opportunity for the UK to gain its independence from the European Union (EU) and create its own rules and regulations regarding art trade for the first time. Here are some of the key ways that Brexit will impact the art industry:
 
Additional barriers to trade
 
Brexit will have an obvious effect on the art market, although the extent of any changes is still largely unknown. Some fear that Brexit will bring about several restrictions and barriers that could harm the industry. For instance, leaving the EU is likely to add additional expense and make transactions more time consuming and complex. This has the potential to deter people from trading with the UK art market. As mentioned above, a major factor in the UK art market’s success has been down to access to overseas talent. Additional restrictions brought in by Brexit could make movement far more challenging and inconvenient for art professionals and creative organisations. This could reduce the number of individuals and groups from the EU touring the UK and performing across the country. The same effect would also apply to UK professionals hoping to complete touring exhibitions around the EU. According to a study by the Art Council, around 64% of culture organisations currently work inside the EU. These statistics suggest that restrictions brought on by Brexit could negatively affect many creative individuals and organisations within the UK art market.
 
New rules surround art trade
 
Despite the above concerns, many people in the art industry view Brexit as an opportunity for the UK art market to gain its independence and set its own rules surrounding art trade for the first time. This will also enable the UK to initiate and negotiate its own trade deals with other countries. Kwok considers Brexit a chance for the UK art market to evolve and strengthen. She notes - “After three years of discussing almost nothing else, the impact of Brexit has already been priced in. There are no surprises left at this point. Despite the current turbulence in the short to medium term, in the long-term, the UK is resilient and will be well-positioned for growth.” There are several ways that the UK art market can take advantage of the new policy changes to grow and gain new revenue potential. In particular, the UK will have the opportunity to amend or lower the level of import VAT which is currently set at 5%. This could help the UK art market gain a competitive edge and compare more favourably to its global competitors: the US (0%) and China (3%).
 
Vision for the future
 
There is much uncertainty surrounding the effects that Brexit will have on the art world. With the UK due to leave the EU on 31st October, art professionals must prepare themselves for what might happen. Kwok believes that now is the ideal time for foreign investors to take advantage of investment opportunities in the UK art market. She notes - “Frieze is taking place at a time when the pound is at a historic low; this is a unique opportunity for foreign investors to make strategic acquisitions.” One certain thing is that art professionals will have to work together to help make the UK art market as open, inclusive, and global as ever.