The cap fits, but tax appeal is the problem

ARTSCAPE:WHAT'S UP with the artists' tax exemption? Actually, what's down is its cap, from €250,000 to €125,000, along with a range of other "specified reliefs" in this week's Finance Bill, and as indicated in December's Budget. Mind you, the adjusted cap is unlikely to have much impact on most artists – figures from 2008 show 50 per cent of artists earn less than €10,000, 70 per cent earn less than €20,000 and 92 per cent earn less than €50,000.

But the real question is, when is something going to change with how decisions are made on who qualifies for the artists’ tax exemption? As time passes the credibility of a progressive scheme ebbs away. That literary works such as Bertie’s ghosted apologia and Gerry Ryan’s memoirs (along with a bunch of sports books, political biographies, and all sorts of other unexpected items) have qualified for the exemption on the basis of their, eh, artistic and cultural merit has made the scheme, designed to aid struggling artists, justifiably the subject of tabloid outrage and public revulsion. This has nothing to do with its original intention, and all to do with how the guidelines have been interpreted.

The Revenue Commissioners’ decisions on whether to grant tax free status, taken with Arts Council advice, are open to appeal. Those turned down by the Revenue can go to the tax appeal commissioners, who are independent of the Revenue and decide on matters of dispute between Revenue and taxpayers. Cases are heard, in a sort of mini court set-up, by one of the two commissioners, Ronan Kelly and John O’Callaghan (more usually the latter, apparently). They are political appointments, for life.

In recent years the interpretation of the guidelines on what qualifies on the basis of artistic merit, particularly with non-fiction, has been loose and generous, with a liberal interpretation of what is “culture”. On appeal, the commissioners appear to take the view that a biography of a sports star is no less valuable than one of an artist. And indeed that may be so, but it also seems to go against the spirit of the original tax exemption.

Going through an appeals process is an expensive and time-consuming business, involving a barrister and solicitor for

Revenue and the appellant, and expert testimony from the Arts Council. Seeing as they were losing so many appeals because of commissioner decisions, the Revenue’s pragmatic approach in recent years and in some cases seems to have been to just grant tax-exempt status in the first place. Rock and a hard place.

All the same, it’s probably a relief, to someone, that the Revenue continued with its loose interpretation of the guidelines to ensure Bertie’s book did qualify; if it had been turned down, there would be the deliciously embarrassing situation where he might have had to appeal the decision to his brother-in-law, Ronan Kelly.

While it is the Revenue’s bailiwick, the Arts Council advises on artistic merit, and considers the exemption to be “enlightened, unique legislation”. The Council commented this week that “the existing guidelines are very clear that biographies and autobiographies do not qualify for the artists’ exemption. The only exception to this is if the book encompasses ‘. . . the subjects of fiction writing, drama, music, film, dance, mime or visual arts, and related commentaries by bona fide artists’.

“In recent years the Revenue Appeals Commissioners have made several rulings in favour of plaintiffs, and against the recommendations of the Arts Council. We were not asked for a recommendation on any book by Bertie Ahern, nor have we considered it, and therefore have no comment on it.”

In recent times, David McWilliams' The Pope's Childrenwon tax-free status on appeal, Elizabeth Pisani's Wisdom of Whores, about the business of Aids, was considered autobiographical, but Lying Eyes(the book about Sharon Collins) was not upheld as it was deemed not to have cast new light on the subject. Coming up next month for appeal are two travel books, written in the first person, which were turned down by the Revenue.

According to those close to the process, while the commissioners sometimes take expert testimony on board, they also appear sure of their own opinion and stand their ground. A book written in the first person stands a good chance of qualifying as an autobiography.

The guidelines are weak and open to huge variations in interpretation, and are clearly in need of an overhaul – and indeed the Arts Council, with the Department of Arts and the Revenue, has drawn up tighter, clearer new guidelines, so that no biographies or autobiographies, except of artists, would be included, as would non-fiction work on arts subjects. A biography such as, for example, Judging Lemasswould still be eligible, because of its archival material and heritage aspect.

These new guidelines were approved by the Arts Council in March 2009 – almost a year ago. But the Department of Arts, Sports and Tourism has not yet forwarded them to the Minister of Finance for approval. And there it rests.

This may work well for some who see the Arts Council and notions of artistic merit as elitist, but on the other hand it has led to the scandalous inclusion of the Bertie book, and many others, which brings the whole thing into disrepute.

That phenomenon, along with the millionaire rock stars, is evidence of brass neck, a malfunctioning moral compass and a bureaucratic unwillingness to sort it out.

Shame.

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At €11,750 the Davy Portrait Award is a decent prize, and out of 300 nominations this year some 28 artists were shortlisted this week - catch the the full list when it is published at davyportraitawards.com.

The winner will be announced in Belfast on February 25th, when the Davy Portrait Awards exhibition opens at the Naughton Gallery, Belfastmoving to Farmleigh House, Dublin in April.

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It’s a Corner, not an Hour. The new Peacock series exploring the reports into child abuse, is called “The Darkest Corner”, not “The Darkest Hour”, as reported during the week. Mea culpa.