The 2024 Autumn Budget: Swings and Roundabouts for the Art World

Despite promising a marked change from the Sunak government’s apparently sceptical approach to the arts, the first Budget of Sir Keir Starmer’s premiership was released at the end of 2024 with little mention of the artistic world. 

There were, however, two key points to note. The first point relates to two interrelated features of the Budget. One was the hike on Capital Gains Tax, the tax paid on gains made when assets are sold at a profit. The second was the long-awaited abolition of the ‘non-dom’ tax regime, a series of rules not requiring tax payments on money earned outside the UK (unless paid into a UK account). 

Regardless of the merits and demerits of these policies, the art market is likely to see a change due to their implementation. Art investors and traders are likely to find themselves disincentivised from selling art, as the tax taken from such sales has increased. The impacts will be even further ranging, though, as many other art market participants will focus on asset restructuring and business strategy alteration to navigate this new tax landscape – a potentially costly process in itself. The combined effect of this means that many patrons and investors might turn away from arts sponsorship and patronage, as focuses turn towards money-saving efforts and restructuring. Many galleries, art groups, collectives, charities, and studios could be left high and dry as a result.

The second key point to be taken from the Budget is aimed at countering this. The government has publicly pledged a 2.6% funding increase to the Department of Culture, Media, and Sport, which calculates at around £2.3 billion. This money will go towards various causes in the arts, especially in the public sphere. One notable use will be the maintenance of the Museums & Galleries Exhibition Tax Relief, a scheme providing 40-45% tax reductions for exhibitions. 

The success of schemes like this, though, remains to be seen. While large London-based institutions like the National Portrait Gallery are openly benefitting from such a scheme, representatives from The Derby Museums have voiced concerns shared by many other smaller organisations that this tax relief is not finding its way out of the South-East. Equally, though, for regional museums with much lower footfall, perhaps benefits will be seen through the government’s £3 million investment in a Creative Careers program to encourage youngsters to get involved with their local artistic scene.

A few final comments remain to be made on arts in the Budget. First, while many saw the Budget as lacking in meaningful art support, perhaps this is deliberate. Although the artistic scene and market requires financing, much work needs to be done elsewhere, such as in undoing the rhetoric of previous governments that many found to be deeply anti-art. The second is that, for lawyers in art, this Budget offers a unique opportunity. As high net worth individuals require asset restructuring, and galleries and art institutions simultaneously seek advice on their own use of funding, law firms (especially those working in private wealth and art) find themselves uniquely placed to shape outcomes to both sides of the issue, guiding tailored and meaningful solutions to their clients in response to these financial changes.

References and Further Reading

"Autumn Budget 2024" (HM Treasury)

"Budget reaction: Regional museums in crisis, music venues at risk" (Arts Professional)