Artist Resale Rights - As Item Charge

Artist Resale Rights - As Item Charge Admin

Here is your guide on how to set up Artist Resale Rights as an item charge within your Snoofa Admin. Including a video!

Instructions

1. Navigate to the System Settings and click on Item Charges on the submenu
   
   
   

2. Click Add Item Charge

3. Add the name of the item charge, in this case, Artist Resale Rights

4. Add who the charge will apply to, in this case Buyer

INFO: In April 2024 within the UK, amounts changed from Euros to Pounds. This simplified things, no longer needing to continually update for exchange rate changes

For Artist Resale Rights we need to select Hammer bound table as calculating the ARR requires a specific logic. If we were to choose the Thresholds option, that would mean a single rate would be applied to the hammer price (e.g. 20% of a Hammer Price of £1000). However, for ARR we need a Sliding Scale, as the payment scale is cumulative, which means that the royalty is calculated based on the % of the resale price falling into each tier (e.g. ARR charges 4% up to £50,000, 3% from £50,000 to £200,000). Another example of this would be calculating income tax.

Here is a breakdown of the current ARR calculations:

Calculating Royalties

Royalties payable under ARR kick in only on re-sales of works above £1,000.

Royalties are paid on a sliding scale according to the resale price of the artwork, as follows:

• 4% up to £50,000;

• 3% between £50,000 and £200,000;

• 1% between £200,000 and £350,000;

• 0.5% between £350,000 and £500,000; and

• 0.25% in excess of £500,000.

Further, the payment of royalties is capped with the total amount paid for any single sale of a work not exceeding £12,500.

Our first line would be From 0 To 50000 at a Rate of 4(%).

Our second line would be From 50001 To 200000 at a Rate of 3(%).

With all the lines filled in, the table should look like below:

6. As royalties payable under ARR kick in only on re-sales of works above £1,000 we need to input a Waive Threshold of £1000.

7. As the payment of royalties is capped with the total amount paid for any single sale of a work not exceeding £12,500 we need to add £12,500 into the Max Value field.

8. The VAT Rate is set to 0 as ARR is exempt

9. The Accounting Code is Snoofa’s Default Accounting Code, but you are able to select a different one.

10. Select No for Eligible for Margin Schema

The Margin Scheme VAT does not apply to this royalty charge, however the lot itself may be eligible and must therefore be consigned under the Margin Scheme.

11. Select No for Customisable Name

This is useful for some more generic Item Charges, such as the Other Amount, which is in Snoofa by default.

When this is set to true, then whenever an Item Charge of this type is being added to an Item, the name of the charge can be changed. For example, when you have a charge that you want to add to an Item but you know that it’s only a one-time charge, then you can use the Other Amount charge, set amount value and set charge name to Repair costs for example.

12. Select Yes for Lot Dependant

The Item Charge can be Lot dependent. For example we have the Buyers Commission charge, which can be differ per Auction. But one Item can be in multiple Auctions (unsold in January, re-offered and sold in February). For that purposes, there is “Lot dependent” parameter of Item Charge.

We can now see the charge in the Item Charges table:

We can add the charge on the Item Detail page of a specific item:

We can see the charge reflected in a final invoice: