Commentary

V16.852 Imported works of art, antiques and collectors' pieces—changes to the reduced rate of VAT

Part V16 Forms and other HMRC material

V16.852 Imported works of art, antiques and collectors' pieces—changes to the reduced rate of VAT

V16.852 Imported works of art, antiques and collectors' pieces—changes to the reduced rate of VAT

VAT Information Sheet 9/99, July 1999

1 Introduction

Why are the changes being introduced?

1.1 Following the introduction of the Seventh VAT Directive in June 1995, which concerned the Community-wide harmonisation of procedures for dealing with second-hand goods, antiques, works of art and collectors' pieces, member states were required to apply a common minimum rate of VAT of at least 5 per cent on a wide range of imported works of art, antiques and collectors' pieces. The previous Government however, agreed a temporary derogation to apply instead an effective reduced rate of 2.5 per cent to a more limited range of such items. Prior to the implementation of that Directive those items had not been liable to import VAT in the UK. The derogation for the 2.5 per cent rate expired on 30 June 1999.

Why can't we continue to apply the 2.5 per cent rate?

1.2 Under the terms of EC law, and the agreement reached by the previous Government in 1994, the UK is obliged to raise its rate of VAT on the importation of certain works of art, antiques and collectors' pieces to at least the normal minimum 5 per cent. Any extension to the term of the UK's derogation, which allows us to apply the 2.5 per cent rate, would have required both the support of the European Commission and the unanimous agreement of all other member states. Despite frequent representations to the Commission and regular

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