This page reviews what trading legislation, regulations and consumer protection standards apply to all artists trading with UK consumers in terms of:
  • what goods and services you sell
  • how you describe and price your goods (e.g. art) and services (e.g. art tuition)
  • how you market your goods and services
  • where and when you sell 
  • how you sell - face to face or online

What do you as an artist NEED TO KNOW about trading
  • When you start to retail face to face (eg. at an Art Fair) you MUST make be in complete compliance with all relevant legislation and standards for trading.
  • When you begin to work on commission you must understand the regulatory framework for trading
  • When you sell online to consumers living in the UK, then UK law applies to you - wherever you are located.
  • What happens when an artist gets investigated by Trading Standards!
  • BUSINESS IN CRISIS: Wrongful or Fraudulent Trading - and Insolvency -  what happens when business gets difficult for the artist or a business artists deal with
This page provides access to:
  • Trading Law and Regulations (UK)
  • Business Companion Guides (UK)
  • Summary statements on Gov.UK relating to various aspects of trading
THIS PAGE MAINLY RELATES TO THE UK
​- BUT LOTS OF THE PRINCIPLES ARE UNIVERSAL

The intention is to develop similar pages for other locations.

​However in general, what is described on this page might be regarded as sound business practice in relation to trading.

What do trading legislation, regulation and standards apply to?
​

BELOW This page continues with information relevant to selling to UK consumers
​Use the following as a CHECKLIST for:
  • what you need to know; and/or
  • what you need to find out.
Trading Laws, Regulations and Standards typically apply to:
  • what you sell and how you describe it
  • where you sell
  • how you sell re. contracts & pricing
  • keeping customers safe 
  • ​business information consumers need
REFERENCE LINKS are typically 
  • either to other pages on this website
  • the UK government website
  • or business companion guides (pdf files) produced by the Chartered Trading Standards Institute and backed by the UK Government's Department for Business
  • legal websites
  • wikipedia
Picture
Art attached to railings and being sold in London - legislation and standards apply to this just as much as if it were in a gallery

What you sell

Any products... that are sold - whether on-premises, off-premises or at a distance - are 'goods'
  • goods e.g. original art, fine art prints, digital prints
  • digital e.g. art e-books, art instruction videos
  • services e.g. art tuition. art workshops, art courses, 

Where you sell

How you sell
​

  • marketing - how you market and advertise your goods (e.g. art) and services (e.g. art tuition)
  • contracts​ eg for sale of art, commissions
  • pricing & payment - terms imposed on buyers for when and how they pay

When you sell
​

  • Trading days and hours - for different types of retail outlet 
  • Insolvency and Wrongful trading - when you continue to trade knowing that you are insolvent.

Keeping customers safe
​

  • product safety eg artwork does not contain unsafe or toxic or harmful products unless these are permitted and labelled as required by law 

Consumer Information
​

  • business information for consumers e.g. trading address, complaints policy, contract cancellation rights, refunds policy
There is some very specific information you must give to consumers in a clear, legible and understandable way before you enter into an agreement with them. This covers such things as your trading address, pricing, complaint-handling policy and cancellation rights. If you do not give certain parts of this information the consumer does not have to pay.
Business companion guide - off-premises sales (my bold)

TRADING LAW, REGULATION & STANDARDS IN THE UK

Contracts must be written in plain language to avoid being misleading and unfair.

What artists "need to know"

Trading and Consumer Protection law and regulations are applicable  to ALL artists selling a good (e.g. artwork) or service to a client (e.g. a commissioned portrait or tuition). 

​BEWARE: Breaking the law or failing to observe the regulations can mean prosecution, fines and/or imprisonment. 

​It's worth making sure that you understand what you can and cannot do - and how the law and regulations protect consumers from any unfair trading (whether or not you understand that is what you are doing!)

ARTISTS / ART TUTORS MUST understand obligations under
  • The sale & supply of goods - statutory rights and remedies
  • Digital content - statutory rights, remedies and compensation
  • The supply of services - statutory rights and remedies
  • The description of goods and services (false descriptions can lead to a prison term)
  • The pricing of goods and services
You NEED to: You NEED to:
  • use reasonable care and skill to deliver the goods or service
  • do what you say you're going to do
  • deliver what you say you are going to produce
The law and regulations applying to retail of goods and/or services in the UK are listed below.

UK Trading and Consumer Rights Legislation & Regulations
​

Below I've referenced the government and government sponsored websites in relation to the various legislation and regulation.

HIGHLY RECOMMENDED: The Business Companion website is a model of simplicity and clarity for the most part.
READ the Business Companion Guides - which are also downloadable as PDF files
E-commerce Directive - see Ecommerce for Artists on this website
​
Consumer law changed on 1 October 2015, as the Consumer Rights Act came into force. The changes cover:
- what should happen when goods are faulty
- unfair terms in a contract
- what happens when a business is acting in a way which isn’t competitive
- written notice for routine inspections to be given by public enforcers, such as Trading Standards
- greater flexibility for public enforcers to respond to breaches of consumer law, such as seeking redress for consumers who have suffered harm

As well as these changes there are 2 new areas of law covering:
- what should happen when digital content (eg online films, games, e-books) is faulty - the act now gives consumers a clear right to repair or replacement
- how services should match up to what has been agreed, and what should happen when they do not or when they are not provided with reasonable care and skill (eg giving some money back if it is not practical to bring the service into line with what was agreed)
Policy paper: Consumer Rights Act 2015 Published 14 August 2015
Consumer Rights Act 2015
  • Important legislation providing better and simpler protection for consumers which is easier to understand.
  • This legislation is also fit for purpose in the context of digital goods and services as well as more traditional goods and services.
  • Replaced the Sale of Goods Act 1979 and Supply of Goods and Services Act 1982
  • provisions relating to goods, digital content, services and unfair terms came into force on 1 October 2015.

Trade Descriptions Act 1968 & Consumer Protection from Unfair Trading Regulations 2008 (latter relates to the EU Unfair Commercial Practices Directive)  
  • Descriptions of what is for sale must always be accurate re. goods (artwork) services (tuition), digital content (videos and/or books) - plus information about consumer rights
  • Descriptions should not give false information, nor should they deceive - or be likely to deceive - a consumer, which then makes him act in a different way. Nor should you give misleading information about prices.
 Insolvency Act 1986
VARIOUS REGULATIONS spell out implementation in more detail

The Business Protection from Misleading Marketing Regulations 2008 
- This covers advertising to businesses.
  • You MUST be accurate and honest and not make misleading statements - see PDF
  • you can’t harass consumers by, for example: including false or deceptive messages; leaving out important information or using aggressive sales techniques
  • Understand the guidelines on consumer protection from unfair trading

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 - see PDF
  • require ALL traders to give consumers specific information
  • consumer rights in relation to UK consumers shopping online
  • differentiates between sales, service and digital contracts - and when a contrast is a distance or offline.
  • covers rights to cancel and refunds

The Consumer Contracts (Amendment) Regulations 2015 - see PDF
  • new rights and remedies in relation to digital content
  • amendments to existing consumer rights and remedies for defective goods and services.
  • reflects changes re Consumer Rights Act 2015 ​
For distance or off-premises sales  - APPLICABLE TO ALL ARTISTS SELLING ONLINE
​
Key information which the trader must provide - in a durable medium (paper or email) - includes:
  • a description of the goods, service or digital content, including how long any commitment will last on the part of the consumer 
  • the total price of the goods, service or digital service or the manner in which the price will be calculated if this can’t be determined
  • how you will pay for the goods or services and when they will be provided to you
  • all additional delivery charges and other costs (and if these charges can't be calculated in advance, the fact that they may be payable)
  • details of who pays for the cost of returning items if you have a right to cancel and change your mind
  • details of any right to cancel - the trader also needs to provide, or make available, a standard cancellation form to make cancelling easy (although you aren’t under any obligation to use it)
  • information about the seller, including their geographical address and contact details and the address and identity of any other trader for whom the trader is acting
  • information on the compatibility of digital content with hardware and other software that the trader is aware of (or can reasonably be expected to be aware of).  
​Source: Consumer Contracts Regulations | Which ​
Online, mail and telephone order customers have the right to cancel their order for a limited time even if the goods aren’t faulty. Sales of this kind are known as ‘distance selling’.
Accepting returns and giving refunds: the law
BUSINESS COMPANION GUIDES REFERENCE: 
​
REFERENCE - OTHER SOURCES:​
WHAT YOU MUST NOT DO

The following are completely banned in all circumstances
FALSE CLAIMS: You cannot:
  • claim to be a member of a trade association
  • claim your product has been approved by a public or private body (unless it has)


MISLEAD CUSTOMERS (availability): You must NOT:
  • use 'bait and switch' advertising (it's fraudulent! Plus breaking the law prohibiting this can result in a criminal prosecution, an unlimited fine and two years in jail.)
  • suggest consumers must make decisions now because your goods and services are only available for a limited time period.

MISLEAD CUSTOMERS (sale context): You must NOT
  • make bogus claims about the reason for sales (eg closing down / moving premises)
  • suggest a product is FREE if the cost of sale is priced into the cost to the customer in other ways (e.g. shipping)
  • send a product with an invoice and imply a customer ordered it when they did not such thing
  • suggest you are a consumer when you are actually a trader
​
COMPETITIONS / PRIZE DRAWS: You must NOT:
  • create any false impressions relating to art prizes or art competitions
  • indicate a prize / award for a competition when it is not awarded
  • suggest that a consumer has won a prize when there is no prize
  • suggest the consumer can claim a prize only after they incur a cost
AGGRESSIVE SALES: You must NOT:
  • suggest a client/consumer cannot leave your premises until they have signed a contract
  • visit a consumer/ potential client at home and refuse to leave
  • be persistent in making unwanted and unasked for approaches by phone, fax or email (except when a trader has a legal right to enforce a contractual obligation)
  • appeal to children to buy a product or service 
  • suggest your livelihood is in jeopardy if the consumer does not buy the product

UNREASONABLE DEMANDS: You must NOT:
  • fail to respond to communications by a client when they want exercise their contractual rights

INERTIA SELLING You must NOT:
  • demand payment for any product sent to a consumer that they did not ask for
  • demand that an unsolicited product is returned by the person you sent it to (i.e. they can keep them!)

PYRAMID SELLING: You must NOT:
  • ​operate a pyramid scheme (as per the legal definition)
  • i.e. take money from a customer so that they can make money by introducing others to the scheme  - as opposed to selling them tangible goods and services
BELOW These videos explains some of the legislation and regulations which underpin consumer rights in the UK.
The Consumer Rights Act 2015 replaced

Trading Standards in England - sources of help and advice
​

The content on Business Companion is written and verified by expert contributors, but is not designed to be a replacement for professional advice and is intended only for guidance; only the courts can give an authoritative interpretation of the law.
GOVERNMENT AND PROFESSIONAL
​
The Business Companion website is
  • hosted by the Chartered Trading Standards Institute and
  • backed by the UK Government's Department of Business. Energy and Industrial Strategy.​
It explains trading standards law in ENGLAND​​

The Chartered Trading Standards Institute - provides support and advice for problems with trading.

Trading Standards - National and Local
  • National Trading Standards - allocate grants that come from Government to tackle high priority national and regional trading standards issues in England and Wales.  It also has teams overseeing a range of issues, from copycat websites to doorstep crime.
  • Local Trading Standards Offices - can be found via the Chartered Trading Standards Institute

The UK Government
TRADING STANDARDS CRIME

The National Trading Standards e-crime team was set up in the UK by the National Trading Standards Board and by the Department of Business, Innovation and Skills to investigate online scams and rip-offs of national significance.

They have also developed an infographic specifically about copycat websites, 
copycat_websites_infographic.pdf
File Size: 355 kb
File Type: pdf
Download File
​​NON-GOVERNMENT RELATED - advice and information
​

What the government has to say about trading 
​

Below you can find links to summarised statements on the Gov.UK website of what you can and cannot do
​
The following relate to how you advertise your art or related product (eg tuition)​
Display of prices
If you’re a retailer, you must display:
- the price of products - this must be in sterling (pounds and pence) and include VAT where applicable
- the price of a single item (the ‘unit price’) for products that you sell loose
When you don’t have to offer a refund
You don’t have to refund a customer if they:
- knew an item was faulty when they bought it
- damaged an item by trying to repair it themselves or getting someone else to do it (though they may still have the right to a repair, replacement or partial refund)
- no longer want an item (eg because it’s the wrong size or colour) unless they bought it without seeing it

You have to offer a refund for certain items only if they’re faulty, such as:
- personalised items and custom-made items, eg curtains
- perishable items, eg frozen food or flowers
- newspapers and magazines
- unwrapped CDs, DVDs and computer software

BUSINESS IN CRISIS: Wrongful or Fraudulent Trading - and Insolvency
​

During difficult trading times and/or a Recession, businesses (of any kind - including art)  can easily slide into situations that have LEGAL repercussions.

These include:
  • wrongful trading - trading while knowing the business has no prospect of an upturn in business
  • fraudulent trading - trading with intent to deceive the creditors
  • insolvency - what happens when you must liquidate the assets of a company to pay the creditors
See also:
​Life in an Art Market Recession
WRONGFUL TRADING

The notion that you can go bust and walk away is WRONG!
  • Wrongful Trading is a "civil wrong" -  introduced in the Insolvency Act 1986,
  • in Australia it's known as "insolvent trading" - which is a useful shorthand to describe the practice
  • it was introduced to make company directors much more responsible for the management of the companies they run - and their deprivation of creditors
  • it means a company director can be liable to make a contribution to the assets available for distribution to creditors if they continued to allow trading knowing that "there was no reasonable prospect of avoiding insolvent liquidation”"
  • there is a defence to a charge of wrongful trading i.e.  if a Director having becoming aware of the likelihood of insolvency then took every reasonable and lawful step to minimise the loss to creditors
Indicators of Wrongful Trading

PUBLIC CHECKS
The public and other businesses can check these
  • Not filing annual returns at Companies House
  • Failing to file annual or audited accounts at Companies House (others can check this too)
HMRC always knows when you
  • build up Tax Arrears  (PAYE, NI, VAT)
  • do not operate PAYE and/or VAT schemes correctly
  • fail to pay PAYE and NIC when due
HMRC can ALWAYS check if you
  • Trade while insolvent
  • Accumulate debts
  • Take deposits from customers BUT you know the product / service will not be delivered.
  • Take credit from suppliers BUT there is ‘no reasonable prospect’ of paying creditor on time
  • Take excessive salaries your company cannot afford
  • Repay a director's loan made to the company rather than other creditors owed money
REFERENCE: Covid Measures in the UK
The Insolvency Act 1986 included a number of provisions that protected creditors from the actions of rogue directors. Specifically, section 214 on wrongful trading required company directors to assess the likely prospect of avoiding insolvency. Continuing to trade when there was no reasonable prospect of avoiding insolvency can have dire consequences, including personal liability for debts and trading losses. 
Once a director or directors of a company conclude (or should have concluded) that there is no reasonable prospect of the company avoiding an insolvent liquidation or, in relation to business conducted on or after 1 October 2015, insolvent administration, they have a duty to take every step which a reasonably diligent person would take to minimise potential loss to the company’s creditors. ​
FRAUDULENT TRADING
  • ​In company law, fraudulent trading is doing business with intent to defraud creditors​​
  • If it can be proven that directors knowingly, carried on business affairs with no intent to pay their debts, then the court may find them guilty of fraudulent trading. ​
REFERENCE:
Upon completion of the CVL, the company will be struck off the Companies House register. Any liabilities which remain unpaid by the company will be written off, unless they were personally guaranteed - in which case the creditor with the benefit of the guarantee may pursue the guarantor.
​A guide to creditors' voluntary liquidation (CVL)  | The Gazette

Bankruptcy & Insolvency
​

During a recession of a period of economic difficulty, it's possible for art businesses within the art sector to either
  • either cease to trade
  • or continue to trde - when this is illegal

Art businesses might be:
  • EITHER the artist's own business
  • OR businesses that artists trade and do business with (e.g. art galleries, art materials shops, print publishers) 
So insolvency needs to be looked at from these  two perspectives
NOTE: When this gets difficult:
  • Bankrupt Individuals:
    • ​your assets are shared between your creditors;
    • you can start again after a period of time.
  • Companies which become insolvent: 
    • MUST liquidise their assets so they can pay their creditors
    • can be complained about and/or penalised if they behave inappropriately (eg trading while insolvent)
Types of insolvency process include:
- Administration: where the aim is to sell the underlying business
- Liquidation: where the gallery’s assets are broken up and sold to pay debts OR
​- Company voluntary arrangements: where the gallery renegotiates its debts.
A bankruptcy order can be made for one of three reasons:
Image by Simon Hill from Pixabay
Picture
Rembrandt van Rijn - Self-Portrait 1659. In 1656, Rembrandt declared himself bankrupt, when he was fifty years old. He then sold nearly everything he owned
BANKRUPTCY / INSOLVENCY - FOR THE ARTIST

Artists will consider bankruptcy when they are unable to pay all their debts. This might be voluntary or come about because creditors get fed up with waiting and force a bankruptcy.
  • Bankruptcy is one way for individuals to deal with debts they can’t pay.
  • ​a Creditors’ Voluntary Liquidation (CVL) - 
    • ​If a company cannot pay its debts, it may decide to put itself into liquidation.
    • This is known as a creditors' voluntary liquidation (CVL). 
    • Putting a company into a CVL is quite straightforward and is usually guided by the insolvency practitioner.
  • A winding up petition is
    • a formal document that states there will be a court hearing to decide if your company should be wound up due to insolvency as you cannot pay your debts as they fall due.
    • HM Revenue and Customs (HMRC) will issue a winding up petition if you have UNPAID TAX debts and you have ignored the reminders asking for payment.
REFERENCE:
INSOLVENCY OF AN ART BUSINESS YOU TRADE WITH - AFFECTING AN ARTIST ​
The art business most likely to become insolvent is an art gallery or art fair due to fact that spend dries up when the going gets tough, trading takes a dip, other companies cease trading  and people lose their jobs

During a Recession, artists are VERY likely to be affected by other business in the art market becoming insolvent - while owing an artist money.

Indeed this can be the main or important reason that an artist becomes insolvent as a result.

In these circumstances, if you have artwork in a gallery you better be sure you have:
  • paperwork demonstrating your art belongs to you and not the gallery (otherwise it might be sold to pay creditors of the gallery)
  • know the name and address of the company or individuals who own /control the business (before the website goes offline!)

You can look up whether or not a business has become insolvent on the Insolvency Register in the UK

You can complain about the conduct of an individual on the Insolvency Register.
Insolvency Notices are published on a monthly basis and all relevant details of the individual and.or company are made public.
The IIR is an amalgamation of the individual insolvency, bankruptcy restrictions and debt relief restrictions registers. The Insolvency Service is required by statute to maintain these registers, keep them up to date and make them available for public inspection.

The IIR contains details of:
  • - bankruptcies that are current or have ended in the last 3 months
  • - debt relief orders that are current or have ended in the last 3 months
  • - current individual voluntary arrangements (IVAs) and Fast-Track voluntary arrangements (FTVAs), including those that have ended in the last 3 months
  • - current bankruptcy restrictions orders or undertakings (BROs/BRUs) and interim bankruptcy restrictions orders (iBROs)
  • - current debt relief restrictions orders or undertakings (DRROs/DRRUs) and interim debt relief restrictions orders (iDRROs)
  • Individual Insolvency Register - Frequently Asked Questions (FAQ) 
In financially uncertain times, both artists and collectors who have works on consignment should take the necessary steps to protect their works of art from seizure by a consignee’s creditors. We have found that many consignors are unaware that, in certain circumstances, they can lose the rights to their artwork to a secured creditor of a consignee gallery or dealer.
REFERENCE - GENERAL:
REFERENCE - ART BUSINESS:
REFERENCE: - CASE STUDIES:

Wedgewood Company
The Wedgwood Pottery trading companies became insolvent and went into administration in 2009. 

Examples of trading standards investigations
​

This is a list of articles which can be read online of artists or art dealers who were investigated by Trading Standards
​

​Trading Standards in different places
​

Law, rules and regulations may vary from place to place. However, in general, principles are typically similar from place to place (eg within Europe)
  • in relation to all goods and services sold to consumers - including art and art tuition
  • typically also apply to artists as well as all other traders.

HOWEVER, you cannot assume that what applies in one place is automatically the same in another place. It's just not true.
  • trading standards and legislation can vary according to where you live
  • it's essential you find out what national, regional and local legislation and practices relate to you - and the onus is on you to find out what they are
  • if you relocate where you retail then you need to check out what the standards are for that area
Wherever you want to trade - in whichever country - you MUST check on
  • what is expected of all retail operations
  • whether or not anything in particular relates to what, how or where you propose to trade

Information about the regulatory rules for business transactions can generally be found on government websites. Some are easier than others! eg  Some are impenetrable!
However other websites can also be useful.
Just remember to check out who created the information first before following it.