How do VAT-free silver bars work?
Silver bars purchased for delivery in the UK are generally subject to 20% VAT.
Physical Gold’s VAT-free silver arrangement works differently. Your silver bars are purchased specifically for offshore storage in Switzerland rather than being imported and delivered into the UK.
As a result, UK VAT is not charged on the qualifying purchase while the silver remains within the offshore storage arrangement.
You still own physical silver. The bars are allocated and segregated within the vault rather than your investment being represented by an ETF, fund or other financial instrument.
Why buy VAT-free silver bars?
VAT represents a significant additional initial cost when purchasing physical silver for delivery in the UK.
Buying silver through Physical Gold’s offshore storage arrangement allows you to acquire qualifying physical silver without the initial 20% UK VAT charge, provided you do not take delivery into the UK.
Silver bars can also offer relatively low premiums compared with purchasing the same quantity of silver through numerous smaller coins.
The VAT-free solution may therefore be particularly relevant to buyers who:
- want to own physical silver;
- do not need to take personal possession of it;
- want to avoid the initial UK VAT charge;
- prefer larger bullion units; and
- are comfortable holding their silver in specialist offshore vault storage.
If you want your silver delivered to you in the UK instead, browse our standard silver bars. + Read more
VAT-free 1kg silver bars
Physical Gold currently offers 1kg silver bars through its VAT-free storage solution.
Each bar contains 1,000g of 999-fine silver and is sourced from available stock from recognised international refiners. The current product is not focused on a particular brand; available bars may come from refiners including Metalor, Heraeus, Umicore, PAMP and others.
This Best Value approach allows the emphasis to remain on acquiring investment-grade physical silver rather than selecting a particular refiner or design.
For investors who specifically want individual 1oz units rather than larger bars, compare our VAT-free Silver Britannia coins.
How is my silver stored?
VAT-free silver bars are stored at Brink’s in Zurich, Switzerland, a specialist provider of secure storage and logistics for precious metals and other high-value assets.
Your silver is held on a fully allocated and segregated basis. This means you retain legal ownership of the physical silver allocated to you rather than simply having a financial claim against Physical Gold. The bullion is also insured while held within the storage arrangement.
You can view the up-to-date value of your holding through your Physical Gold account.
For further details, including current charges, see our delivery and secure storage page.
What does fully allocated and segregated mean?
With allocated silver, specific physical bullion is held on your behalf rather than your investment representing a general entitlement to an equivalent quantity of silver.
Segregated storage means your allocated holding is kept separately within the storage arrangement.
This distinction is important because you are purchasing physical silver bullion, rather than buying exposure to the silver price through an investment fund or financial product.
Can I take delivery of my VAT-free silver bars?
VAT-free silver bars are specifically offered as storage-only products.
They cannot be delivered into the UK while retaining their VAT-free status. If you subsequently choose to import the bars and take delivery in the UK, VAT will become applicable.
If taking physical possession of your silver is important to you, choose from our standard silver bars for UK delivery instead.
The choice is therefore relatively straightforward:
Want UK delivery? Buy standard silver bars and pay the applicable VAT.
Don’t require UK delivery? VAT-free silver bars held in Zurich provide an alternative.
VAT-free silver bars or VAT-free silver coins?
Physical Gold offers both silver bars and Silver Britannias through its offshore VAT-free silver solution.
VAT-free silver bars provide physical silver in larger individual units and may appeal to buyers focused on acquiring silver at a competitive premium.
VAT-free Silver Britannias provide the divisibility of individual 1oz coins. They also benefit from Capital Gains Tax exemption for UK residents because Britannias are British legal-tender coins.
Silver bars do not benefit from the same legal-tender CGT exemption.
For larger holdings, the difference in Capital Gains Tax treatment may therefore be an important consideration when choosing between VAT-free bars and Britannias.
Understanding Premiums and Storage Costs
VAT-free does not mean there are no costs associated with buying and owning the silver.
The purchase price of a VAT-free silver bar consists of the underlying value of the silver plus the applicable bullion premium.
Storage charges also apply while your silver remains in Zurich. Physical Gold’s current published standard charge for VAT-free silver storage is 0.75% + VAT semi-annually, subject to a minimum semi-annual charge.
Storage charges and minimums can change, so I would not hard-code the minimum charge into this category copy. Instead, check the current charges on our delivery and secure storage page.
When comparing VAT-free silver with standard silver for UK delivery, consider the overall cost of ownership – including the bullion premium and ongoing storage – rather than looking at the VAT saving alone.
How much is a 1kg silver bar worth?
A 1kg silver bar contains 1,000g of pure silver, so its underlying bullion value is closely linked to the prevailing silver price.
The actual purchase price will also include the applicable premium, while the price available when selling will reflect the silver price and prevailing market conditions at that time.
You can check the underlying live silver price in pounds sterling before purchasing.
What happens when I want to sell?
You do not need to bring your VAT-free silver bars into the UK before selling them.
Silver held within Physical Gold’s Zurich storage arrangement can be sold directly from storage, avoiding the need to transport the bullion to the UK first. Physical Gold’s current product information states that customers can initiate a sale from storage using its silver sale process.
This also means you do not need to incur UK import VAT simply in order to sell bullion that remains within the offshore arrangement.
If you already hold silver bars personally in the UK and want to sell them, see our sell silver bars page instead.
VAT-free silver bars and Capital Gains Tax
The VAT treatment of the initial purchase and the Capital Gains Tax treatment of a subsequent gain are two separate issues.
The offshore storage arrangement allows qualifying silver bars to be purchased without the initial UK VAT charge while they remain within the arrangement.
However, unlike qualifying British legal-tender silver coins, silver bars are not automatically exempt from UK Capital Gains Tax.
CGT may therefore need to be considered when silver bars are sold at a gain, depending on your individual circumstances and the applicable rules and allowances.
Investors for whom CGT treatment is particularly important may wish to compare the bars with VAT-free Silver Britannias.
Why buy VAT-free silver bars from Physical Gold?
Physical Gold is a specialist precious-metals dealer based in London’s Hatton Garden.
Our VAT-free silver solution provides a way to own allocated physical investment-grade silver without paying UK VAT on the initial qualifying purchase, provided the bullion remains within the offshore storage arrangement.
Your silver is held on a fully allocated and segregated basis at Brink’s in Zurich, with secure storage and insurance forming part of the storage arrangement.
For assistance with VAT-free silver bars, call 020 7060 9992 or email info@physicalgold.com.