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Artists, Taxes and Benefits: An International Review

October 17, 200517 October 2005

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This study is a very useful comparative overview of the main features of tax and social security policies for artists in Australia, Canada, Denmark, Germany, Ireland, the Netherlands and the UK. On the basis of the international review, the study proposes improvements for the UK system of artists’ taxes and social security to try to ensure that artists have opportunities for viable and sustainable careers. The international review was undertaken concurrently with a quantitative analysis of artists’ labour markets in the UK and a series of focus groups with UK artists.

The report finds a number of common issues between the seven countries, including: the awkward fit of artists (who can be simultaneously employed and self-employed) into tax and social security legislation; large fluctuations in artists’ income, leading to significant tax burdens in good years; and significant unpaid research time for artists, a time during which they may not be eligible for unemployment benefits.

There are also many differences between the countries. Four of the seven countries have an income averaging scheme for artists (Canada does not). Ireland exempts creative artists from income tax, while none of the other countries do so. Four of the seven countries have a variety of special benefits or allowances for artists under social security systems (Canada does not). Direct financial aid comes in varied forms and is treated differently in the seven countries. For example, the Australia Council’s grants are subject to Australian GST, while Arts Council of England grants are fully tax-exempt. All seven countries have some form of incentives for private donations and sponsorships of the arts.

The report’s recommendations include: clearer information for artists about taxation and social security; increased flexibility in reporting incomes and employment status; income averaging; reduced business taxation rates for start-up artistic businesses; and innovative and flexible assistance for artists starting out.

The report gives a short description of each country’s taxation and social security systems for artists and also provides an analysis of key issues in the UK, including the definition of “artist”, artists’ employment and working patterns, public funding, and taxation.

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