First of all, we’ll briefly explain what VAT is and when it applies. We then quickly move onto how this applies to purchases of precious metals, and then finally reveal some powerful methods of buying gold in the UK without paying any VAT at all!
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Value Added Tax (VAT) is added on to most consumer goods and services in the UK. The current general rate of VAT is 20% with some items being at a reduced or zero rate. This is added at the point of sale and the consumer will bear the charge.
Many food and drinks are zero-rated except alcohol, confectionery and hot food. Most cultural and leisure activities are exempt as are some health, education and charity goods and services.
If you buy any form of silver in the UK, your purchase is
subject to 20% VAT, regardless of purity and whether it’s a coin or bar. Despite this cost, physical silver investment in the UK has continued to grow in popularity, as analysts believe the silver price is severely undervalued.
Prior to Brexit (31/12/2020), Physical Gold Limited were able to provide silver coins and bars without VAT. Sadly, the UK’s departure from the EU meant that the treaty which brought VAT-free silver ended.
Whilst we can’t provide silver VAT-free anymore we are still able to sell popular silver coins and bars at similar all-inclusive prices. We have made a number of changes to our silver business, which benefit the final price to our customers, these are:
Overall, these savings negate a lot of the increased price for VAT, so much so that the overall increase price caused by having to pay VAT is negligible. Additionally, we can say we are competitive with other UK dealers and our silver still represents great value for money.
Another benefit is that we can now accept mixed orders for gold and silver. You can now pay for your silver purchases by credit card up to £10,000 and mix gold and silver in the same order – offering you more flexibility.
We offer a range of bullion coins from 1oz Britannias and 2oz Queen’s Beasts coins to the most popular foreign silver coins. If you’re buying a large number of silver coins or looking to build a substantial holding over time, then don’t forget that any UK silver coins are also Capital Gains Tax-free to UK residents.
We are at able to deliver pure silver bars to UK addresses. You can benefit from the lower premiums of the larger silver bars, and buy silver bars delivered directly to your door.
For some, while silver investment is a great idea, they don’t want to store the metal themselves. In this case, we provide an alternative solution for those wishing to buy VAT-Free silver bars for storage. Our silver bars are stored, on your behalf, in the Channel Islands. Keeping them offshore means your purchase is exempt from VAT as they fall outside of UK tax. With large bars available, you’re able to obtain tighter margins on your silver, while still being tax efficient
This depends on what type of gold you buy. Since the 1st January 2000, the VAT Act 1994 exempts Investment Grade Gold from Value Added Tax. So as long as your purchased gold qualifies as Investment Grade, then no VAT will be charged.
There are a few requirements for gold to qualify for an exemption:
Firstly, it has to be in the form of a coin or a bar. For this reason, VAT is still added to gold jewellery. You should also avoid gold dust, gold ore and gold watches if you want to be tax efficient.
If you opt for a gold bar, the purity needs to be at least 995 thousandths. The good news is that a majority of gold bars on the market exceed this, at 999 thousandths gold, with the rest generally meeting the minimum requirement.
..and how about coins
For gold coins, the purity target is lowered to 900 thousandths, meaning that any coin of 22 carats or higher will qualify. There are a few extra guidelines for coins – they must be minted after 1800, have been legal tender in its country of origin and not usually sell at more than 180% of the market value of its gold content. Essentially these additional rules exclude very old, obscure numismatic coins.
6 Hacks to buying the best value gold sovereign coins – Watch our video now!!!
If all this sounds complicated, don’t worry. We only sell gold coins and bars that meet these requirements and qualify as Investment Grade, so you’ll never pay Value Added Tax when buying gold through Physical Gold.
How can you take this a step further
If you want your gold investment to be completely tax-efficient, then buying UK gold coins also benefits from being Capital Gains Tax-free. They already meet the VAT exempt criteria but are also tax-free upon sale due to their legal tender status. With each Sovereign, Britannia, special edition UK coins and variants of these, each coin possesses an actual face value. The Government can’t tax you on the movement of legal currency, so buying and selling UK gold coins is completely tax-free!
Daniel Fisher formed physical Gold in 2008, after working in the financial industry for 20 years. He spent much of that time working within the new issue fixed income business at a top tier US bank. In this role, he traded a large book of fixed income securities, raised capital for some of the largest government, financial, and corporate institutions in the world and advised the leading global institutional investors. Daniel is CeFA registered and is a member of the Institute of Financial Planning.