§ Lord Kennetasked Her Majesty's Government:
Whether VAT is currently charged at the full rate on all sales, including sales at auction, of works of art in the United Kingdom, and if not, at what rate is it charged, and for what reasons this is.
§ Lord HenleyVAT is charged at the standard rate on all sales of works of art in the United Kingdom where there is a liability to the tax. However, following Royal Assent to the Finance Bill, certain works of art, antiques and collectors' pieces which are presently exempt from VAT on importation into the United Kingdom from outside the European Community will become subject to VAT. In practice, the standard rate will apply, exceptionally, to a reduced taxable value (approximately 14 per cent. of the full value) and subsequently the effective rate of import VAT will be 2.5 per cent.