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I think that the main issues and unfairness of this legislation have been well covered in the correspondences. I think most of us have come into the trade from a love of what we choose to deal in. Perhaps in the past a good living was to be made by many of us. This for most of us it is becoming ever more distant. I questioned whether I should expose my poor business performance, however I feel I am certainly not alone and am a typical example of how art and antique businesses are suffering, and this point needs driving home to those who appear determined to make our precarious positions worse.

Selling high value stock does not mean we are wealthy individuals, who can support the infliction of such unjustifiable charges. When times were better I invested in a large quantity of diverse stock, that I was attracted to, thinking I could appeal to a larger market, but largely as I really enjoyed the artwork and wanted to pass on my enthusiasm. Unfortunately this was done by borrowing large quantities of money in addition to remortgaging our home, encouraged by years of steady growth. Consequently when the recession came I was in a very vulnerable position, hit by both the heavy borrowing costs and the sudden decline in value of my stock, and an inexplicable reduction in sales. By working incredibly hard for the past 6 years working 6.5 days a week 10 hours per day, running a gallery and exhibiting at on average 20 fairs a year, (it was more, but now as the market is so poor some of the fairs have stopped as exhibitors were consistently losing money and pulled out) I have covered 95% of my costs, approx. £275000, but sadly not quite managed to draw a wage, but worth carrying on year after year as it seemed perhaps better times would return before it was too late.

I know there are many dealers in similar positions to a lesser or greater effect. Some are household names, talk of moving premises to lessen their losses, not daring to assume that a profit may be in sight. Art dealers for several generations well known throughout the country coming to an abrupt end as an unprofitable business is unattractive to subsequent generations. Elderly dealers unable to retire, carrying an encumbrance of stock, they are unable to shed, exhibiting at antique fairs, that start slowly leaves them more than satisfied to cover their costs, having avoided what seemed another inevitable loss.

This legislation is a tax to benefit the descendants and heirs, of in the main successful artists, who have already benefited from their success and have not been handicapped in any way by being related to the artist, and needing compensation. DACS are like a dysfunctional Robin Hood stealing from the poor to give to the rich. Why also should those that have invested and supported in these artists work be penalised by the lack of value in them, as the Art Dealers shy away from buying these works, in addition to the 4% automatically lost. Particularly the case at the lower end of the scale, as the penalties are proportionately that much less at the top end on the market. It is inevitable this tax will drive many of us out of business, we cannot put our prices up we are already seen to be expensive compared to the auction houses, yet we are still expected to give enormous discounts. Similarly with the absurd increase in VAT to 20% which we absorbed, after which I found I was paying less VAT as the market was more depressed resulting in fewer sales, as people had generally less money to spend.

The administrative burden on small businesses has become much worse, we cannot afford the staff to deal with it. The Inland Revenue are demanding we inform them in ‘Real Time’ every time we pay our empoyees. It is ridiculous now instead of paying my 1 employee weekly he is paid monthly, and I am worried of getting into deep trouble if I give him a £50 sub! We cannot cope with the administrative burden of DACS.

It is very sad to see the changes in the high streets of our towns & cities, Chester used to have 16 antique shops and art galleries 20 years ago, now there are 3, hanging on, despite having little incentive to, yet opening 7 days a week because we are expected to. This is typical of what is happening throughout the country. People enjoy these sorts of shops and would be disappointed at their demise and our culture would be poorer. We do need help from the government and they should not be introducing legislation which accelerates the demise of these businesses. We need to consider our own culture and not be influenced by the follies of the rest of Europe.

Our time should be spent trying in all the many ways possible to make or keep our businesses profitable and yet in these difficult times we have to spent time fighting such absurd issues as this.
I am very grateful to all in the trade who have contributed to this.

Baron Fine Art

Steve Baron

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