UK Parliament London

Artist’s Resale Right royalties are paid on original works of art including paintings, sculptures, collages, ceramics and graphic works.

Image: Laura Chesters

Enjoy unlimited access: just £1 for 12 weeks

Subscribe now

The new thresholds started applying for all qualifying sales from April 1.

The levy, brought in under an EU directive in 2006, gives creators of original works, and their families for 70 years after their death, the right to receive a payment when their work is resold by ‘an art market professional’ such as a dealer or auction house.

While some members of the trade hoped that the ARR levy would be changed or even abolished after Brexit, the UK committed to continuing the levy in the subsequent trade deal agreed with the EU.

Under UK law, the calculation of ARR royalties was set out in euros and the government confirmed to ATG back in 2021 that it had “no plans to make changes to either the rates of Artist’s Resale Right that are applied or how the levy operates”. However, it did not rule out changing the currency at a future date.

With the necessary legislative changes having now been made, the Department for Business and Trade said in a statement: “This post-Brexit change reflects the UK market better and reduces costs to UK businesses when calculating royalty payments.”

ARR royalties previously applied on qualifying works where the sale price exceeded €1000. This has now changed to £1000.

The thresholds for the sliding scale of the levy have also been switched on a direct one-to-one basis from euros to pounds. The new thresholds for ARR in the UK are as follows:

  • 4% up to £50,000 (previously €50,000)
  • 3% between £50,001-200,000 (previously €50,001-200,000)
  • 1% between £200,001-350,000 (previously €200,001-350,000)
  • 0.5% between £350,001-500,000 (previously €350,001-500,000)
  • 0.25% in excess of £500,000 (previously €500,000)

The maximum amount an artist or an artist’s estate can receive per sale has been changed from €12,500 to £12,500, while the ‘bought as stock’ exemption is amended so that if the work of art was acquired directly from the artist and is resold within three years for a sum less than £10,000 (previously €10,000), the sale is ARR exempt.

A number of dealers and auction houses in the UK previously told ATG that the daily fluctuations of currency rates created an additional administrative burden in their day-to-day business. At a three-day auction for example, an artist whose work sold for close to the €1000 cut-off could be subject to ARR payment on one day but not on the next.

The conversion to pounds resolves this issue but also raises the bar for all the thresholds by around 17% (using the exchange rate at the time of writing) which creates mixed consequences for the trade. In effect this means that fewer works will reach the initial threshold at which ARR applies (£1000 as opposed to €1000).

However, for most works that sell well above this level, the amount of ARR actually paid will increase. For example, under the new regime in pounds, the royalty payable for an artwork sold for £200,000 would amount to £6500. Previously it was €6840 (£5846.15).

Caught by surprise

It also appears that many art market businesses were unaware these changes were due to come in. Most auction houses for example are still quoting the ARR charges in euros on their websites, while two regional salerooms told ATG that they weren’t informed of the changes until contacted by one of the collecting agencies via email the week before they started applying on April 1.

One auction house that has already updated its website is Lyon & Turnbull. Philip Smith, head of Modern & Post-War Art & Design at the firm told  ATG: “I did have a notion that this was supposed to be coming in but was surprised that this has already been implemented yesterday. It appears that there has been little information supplied to the trade on this, and of course this is also on top of Australian works now also being applicable for ARR [see below].

“The change of currency should hopefully be positive for traders in the UK in making it easier to calculate rates based on the pound and add greater transparency for consumers in the UK, all of which are simplifications which I welcome.”

The government laid down the regulatory changes back in October and contacted The British Art Market Federation at the time. BAMF then sent copies to its members (trade associations and leading auction houses). ATG has contacted the Department for Business and Trade to ask what efforts were made to inform the industry but had yet to receive a response at the time of publication.

Australian sales

Separately, the UK and Australian governments have announced an ‘official recognition of reciprocity’ for Artist’s Resale Right. It comes as part of the UK-Australia Free Trade Agreement which came into effect on March 31.

Australia has had a ‘Resale Royalty Scheme’ since 2010 but the agreement means that British artists will now earn royalties when their artwork is resold in Australia, and vice-versa.

Under the new legislation passed by the Australian parliament, UK artists are now entitled to royalties in line with the Australian system – currently 5% of the sale price of artworks sold commercially for AUS$1000 or more. Previously, British artists would not have received any royalties when their artwork was resold in Australia.

The Department for Business and Trade said British artists exported £10m of items to Australia in 2021, while total art sales in the Australian market were over AUS$140m (£72.5m) in 2023.

According to the Alliance for IP, UK artists earn on average £5000 a year in ARR, with over 80% using their royalties for living expenses and art materials.