Painter selling through UK based Gallery -VAT

VAT status of Painter

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Hello All, 

I just needed some direction on this so thank you in advance.

I am currently working with a painter / Artist whom sells her drawings via a UK based gallery (whom is VAT registered)

Majority of the drawings are sold to indivduals based abroad such as China.

The gallery charges the painter 50% comission inc VAT and then the balance is forwarded onto the Painter.

I wanted to know if there would be requirement to register for VAT, UK based sales is under the threshold however if we were to include the sales made to overseas via the gallery then this would soon push her over the threshold.

The confusion for me is that the Gallery is UK based and VAT registered, and they are the ones that pay the painter after taking out thier commision, however the end customer is not based in the UK.

 

Replies (7)

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By rmillaree
21st Jun 2024 17:46

I wanted to know if there would be requirement to register for VAT, UK based sales is under the threshold however if we were to include the sales made to overseas via the gallery then this would soon push her over the threshold.

exports of goods are zero rated so do need to be included in your calculation of turnover for vat registration purposes if you/they are selling to someone and exporting from the uk.

you also need to be careful who is selling what to whom

if "painter" is selling to uk gallery then its possible that all sales could be standard rated if person who lives abroad is buying from gallery and not you.

note ioss vat could rear its ugly head here

Thanks (1)
Out of my mind
By runningmate
21st Jun 2024 18:23

Does the original artist sell to the overseas customer or to the UK gallery? That is the key question, I think.
RM

Thanks (1)
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By David Ex
21st Jun 2024 18:44

Is VAT Notice 703 relevant to your query?

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VAT
By Jason Croke
21st Jun 2024 19:07

You need to bottom out who is seeking to who. Either artist sells direct to customer and gallery acts as agent/middleman (sort of like eBay) or artist sells direct to gallery and gallery sells to customer.

Once you understand that then the answer to your VAT registration question will reveal itself.

Thanks (2)
Replying to Jason Croke:
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By jonharris999
22nd Jun 2024 09:51

+1

Consider the contract between the artist and the gallery - which may be easier said than done if it is not written down, or if it is written but is silent on this point (which would not be particularly unusual in this sector, esp if a DIY contract).

Also consider, if you are not familiar with this sector, the other relevant points you might be missing in relation to the artist's income tax affairs.

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Replying to jonharris999:
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By David Ex
22nd Jun 2024 18:19

jonharris999 wrote:

Also consider, if you are not familiar with this sector, the other relevant points you might be missing in relation to the artist's income tax affairs.

Easely done ….

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Replying to David Ex:
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By jonharris999
23rd Jun 2024 05:07

An artist with clients in China
Has a VAT issue which isn't minor;
His advisor needs knowledge
And why go to college?
For using AWeb is much finer.

Thanks (2)