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HMRC internal manual

Imports

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Valuation for import VAT: exceptions to the normal rules: permanent imports: works of art, antiques and collectors’ items

Imports of works of art, antiques and collectors’ items are taxed on a reduced value at importation, giving an effective VAT rate of 5 per cent (see Notice 702, paragraph 3.4).

Law

The Vat Act 1994, Section 21 gives the general valuation rules. Subsection 4 sets out the method for arriving at a reduced valuation, to which the 17.5 per cent VAT rate is applied, to produce an effective import VAT rate of 5 per cent. Sub-sections 5 to 6D contain definitions of the goods that qualify to be taxed on a reduced value at importation, giving an effective VAT rate of 5 per cent.

The VAT Act 1994, Section 21

  1. -

(4) [Subject to subsection (6D) below, for the purposes of this Act, the value of any goods falling within subsection (5) below which are imported from a place outside the member States shall be taken to be an amount equal to 25 per cent. of the amount which, apart from this subsection, would be their value for those purposes.]

(5) The goods that fall within this subsection are -

(a) any work of art;

(b) any antique, not falling within paragraph (a) above or (c) below, that is more than one hundred years old;

(c) any collection or collectors’ piece that is of zoological, botanical, mineralogical, anatomical, historical, archaeological, paleontological, ethnographic, numismatic or philatelic interest.

(6) In this section “work of art” means, subject to subsections (6A) and (6B) below

(a) any mounted or unmounted painting, drawing, collage, decorative plaque or similar picture that was executed by hand;

(b) any original engraving, lithograph or other print which-

(i) was produced from one or more plates executed by hand by an individual who executed them without using any mechanical or photomechanical process; and

(ii) either is the only one produced from the plate or plates or is comprised in a limited edition;

(c) any original sculpture or statuary, in any material;

(d) any sculpture cast which-

(i) was produced by or under the supervision of the individual who made the mould or became entitled to it by succession on the death of that individual; and

(ii) either is the only cast produced from the mould or is comprised in a limited edition;

(e) any tapestry or other hanging which-

(i) was made by hand from an original design; and

(ii) either is the only one made from the design or is comprised in a limited edition;

(f) any ceramic executed by an individual and signed by him;

(g) any enamel on copper which-

(i) was executed by hand;

(ii) is signed either by the person who executed it or by someone on behalf of the studio where it was executed;

(iii) either is the only one made from the design in question or is comprised in a limited edition; and

(iv) is not comprised in an article of jewellery or an article of a kind produced by goldsmiths or silversmiths;

(h) any mounted or unmounted photograph which-

(i) was printed by or under the supervision of the photographer

(ii) is signed by him; and

(iii) either is the only print made from the exposure in question or is comprised in a limited edition;

(6A) The following do not fall within subsection (5) above by virtue of subsection (6)(a) above, that is to say-

(a) any technical drawing, map or plan;

(b) any picture comprised in a manufactured article that has been hand-decorated; or

(c) anything in the nature of scenery, including a backcloth.

(6B) An item comprised in a limited edition shall be taken to be so comprised for the purposes of subsection (6)(d) to (h) above only if-

(a) in the case of sculpture casts-

(i) the edition is limited so that the number produced from the same mould does not exceed eight; or

(ii) the edition comprises a limited edition of nine or more casts made before 1st January 1989 which the Commissioners have directed should be treated, in the exceptional circumstances of the case, as a limited edition for the purposes of subsection (6)(d) above;

(b) in the case of tapestries and hangings, the edition is limited so that the number produced from the same design does not exceed eight;

(c) in the case of enamels on copper-

(i) the edition is limited so that the number produced from the same design does not exceed eight; and

(ii) each of the enamels in the edition is numbered and is signed as mentioned in subsection (6)(g)(ii) above;

(d) in the case of photographs-

(i) the edition is limited so that the number produced from the same exposure does not exceed thirty; and

(ii) each of the prints in the edition is numbered and is signed as mentioned in subsection (6)(h)(ii) above.

(6C) For the purposes of this section a collector’s piece is of philatelic interest if-

(a) it is a postage or revenue stamp, a postmark, a first-day cover or an item of pre-stamped stationery; and

(b) it is franked or (if unfranked) it is not legal tender and is not intended for use as such.

(6D) Subsection (4) above does not apply in the case of any goods imported from outside the member States if-

(a) the whole of the VAT chargeable on their importation falls to be relieved by virtue of an order under section 37(1); or

(b) they were exported from the United Kingdom during the period of twelve months ending with the date of their importation.

(7) An order under section 2 (2) may contain provision making such alteration of the percentage for the time being specified in subsection (4) above as the Treasury consider appropriate in consequence of any increase or decrease by that order of the rate of VAT.

Works of art

Only those works of art defined above are eligible for the reduced valuation at importation. The definition is also in Notice 702 section 3.

Antiques

For customs duty purposes goods that can be entered to chapter headings 97.01 to 97.05 should not be entered as antiques under chapter heading 97.06.

Collectors’ items

Definitions and examples of items which qualify for the effective reduced VAT rate, are given above and in section 3 of Notice 702 VAT: Imports.

Classification to most categories causes few problems as the distinctions are clearly defined. However, the concept of “historical interest” is more subjective and consequently causes the most problems. Any questions regarding the classification of goods should be referred to ECSM - Tariff Classification.

All items listed in (a) to (d) above are also eligible for the second-hand margin scheme. Further information on the second-hand margin scheme is given in both The Margin Schemes (VATMARG) and Notice 718.

Customs procedure codes (CPCs)

Eligible goods should be entered to the following CPCs:

  • 40 00 200 for imports from third countries
  • 49 00 029 for imports from special territories.

Entry to these CPCs constitutes a declaration by the importer/agent that the goods qualify for a reduced value for import VAT and are eligible for the second-hand margin scheme, where appropriate.

For temporarily imported works of art, collectors items and antiques as defined in Annex IX of Directive 2006/112/EC, imported for the purposes of exhibition with a view to possible sale, refer to Special Procedures guidance and Notice 3001. Eligible goods should be entered to CPC 53 00 D25, full security for VAT will be required. Commission Delegated  Regulation (EU) 2015/2446 Article 234 (3) (a).

It may be possible for traders  who meet the criteria to import goods as defined in Annex IX of Directive 2006/112  for the purposes of exhibition with a view to possible sale, to import the goods under the temporary admission waiver scheme.  For further details refer to Special Procedures guidance and Notice 3001.