§ Mr. GreenTo ask the Chancellor of the Exchequer if he will make a statement on the impact of VAT harmonisation in the EU on London's art market. [21466]
§ Dawn PrimaroloGoods imported into the UK normally bear VAT at the standard rate (17.5 per cent.). Under the terms of EC law introduced in 1995, certain works of art, antiques and collector's pieces imported into the UK are eligible until 30 June 1999 for an effective rate of VAT at importation of 2.5 per cent. After that date, the UK should increase the VAT rate to at least the normal minimum effective reduced rate of 5 per cent.
During 1998, the EC Commission is expected to review the effects of the relevant EC legislation on the competitiveness of the Community art markets compared to third countries' art markets. The relevant Government Departments are working closely with art trade bodies to evaluate those effects, and to ensure that the position of the UK's fine art market will be properly represented in that review.