Shredding Banksy (ctd.)
October 18 2018
Video: Banksy
There's a new video from Banksy, in which the artist suggests that the entire picture was meant to be shredded. Not so sure.
But the most interesting thing is that this new video confirms the first video (which Banksy released immediately after the Sotheby's sale) was not the full picture. So to speak. As I pointed out at the time, the shredding mechanism we were initially shown (with a series of pantomime razor blades) would not have actually worked. And in the new video we see a very different mechanism, using rollers, which would appear to be more plausible.
So why go to all the trouble of making two films? Why create one shredding mechanism purely for show?
Incidentally, a reader writes wondering what the taxman will have to say about all this:
Sotheby's claim on their website that after the gavel fell, Banksy created a new work of art. If it is new, then it should attract VAT at the standard rate on the hammer price.
If the vendors claim that the picture was a gift back in 2006, HMRC will point out that the electric cutting device is a new addition, integral to the artwork, so that the net proceeds would be subject to income tax.
A minefield!
Update - it all comes down to the timing of the 'creation'. Another reader writes:
“Sotheby's claim on their website that after the gavel fell, Banksy created a new work of art. If it is new, then it should attract VAT at the standard rate on the hammer price. “
The new work of art was created AFTER the painting was sold (assuming reframing and insertion of the shredder is not creating a new artwork) so on that basis I am afraid I disagree with your correspondent.
Of course, if it is actually fresh from Banksy’s Studio then I am sure he will be accounting for VAT on the proceeds; only the Sotheby’s invoice will not state this so the purchaser will not be able to reclaim the VAT when she exports it home to the Middle East.
“If the vendors claim that the picture was a gift back in 2006, HMRC will point out that the electric cutting device is a new addition, integral to the artwork, so that the net proceeds would be subject to income tax.”
Again, it depends who the vendor is. If I as a private individual invite Banksy to amend a piece of art he gave me a decade ago and then I sell it, as a one-off, then I am unlikely to be trading, so therefore am within the CGT regime. Interestingly, machinery - like antique clocks or cars - is free of CGT too, so if (and it is a big if though maybe not if it is ‘integral’ as your correspondent suggests) the vendor can argue that it is a machine on account of the shredder then it is entirely tax free. Machinery is CGT free as it is regarded as having only a short life, the picture itself certainly had a short life... And as the sale took place before the shredder revealed itself the vendor’s profit has nothing to do with the ‘unusual’ reframing. The idea that reframing a picture and reselling it a decade later brings you into trading is too far-fetched for me.
