VATVAL09600 - Reduced valuation for imported works of art- Paragraph 11A, Schedule 6, VATA 1994
Finance Act 2021 inserted a new paragraph 11A into Schedule 6 to the VAT Act 1994.
Paragraph 11A of Schedule 6 to the VATA 1994 provides:
"11A(1)Sub-paragraph (2) applies to goods that—
(a)fall within subsection (5) of section 21 (works of art etc), and
(b)are treated as supplied in the United Kingdom as a result of section 7(5B) (importation of consignments with an intrinsic value not exceeding £135).
(2)The value of a supply of goods to which this sub-paragraph applies is to be taken to be an amount equal to 25% of the amount that, apart from this sub-paragraph, would be its value for the purposes of this Act.
(3)An order under section 2(2) may contain provision making such alteration of the percentage for the time being specified in sub-paragraph (2) as the Treasury consider appropriate in consequence of any increase or decrease by that order of the rate of VAT."
This paragraph ensures that works of art, antiques and collectors’ items imported to the United Kingdom with a value up to and including £135 are subject to an effective 5 per cent rate of import VAT. This is achieved by valuing the supply of the imported goods at 25% of the amount that has actually been paid for them, and applying 20% VAT to that reduced valuation.
Works of art, antiques and collectors’ items imported into the United Kingdom are subject to a reduced value of 25% as a result of section 21(5) of VATA.
However, since January 2021, certain imported goods which are in consignments with a value of no more than £135 are treated as being supplied in the United Kingdom. Works of art, antiques or collectors’ items included in these assignments would therefore not benefit from the reduced value in section 21, because they would not be considered as imported. Paragraph 11A of Schedule 6 ensures that such items continue to benefit from the reduced valuation, and the effective reduced rate.