About VAT on Gold and Silver Investment

When investing in bullion, it is important to consider the VAT implications of your purchase. One of the most common question is “Do I have to pay VAT on my bullion investment”. For silver yes. For gold no. This makes one of the biggest reason to buy gold. Currently, HMRC regards the precious metal as VAT exempt.

VAT on Investment Gold

Before 2000, VAT rules related to gold sales varied in Europe. Some countries didn’t charge VAT at all on gold (or a very low rate), while gold bullion was subject to VAT in UK. Therefore, UK was at a disadvantage compared with other EU countries.

Since the 1st January 2000, investment gold is exempt of VAT in UK. It is treated the same as other investments, such as stocks and shares. This include gold bars and gold bullion coins sold at under 80 % premium over their intrinsic metal value. Most of the modern bullion coins fall under this category, such as the Sovereign or the Krugerrand.

These rules were applied according to the VAT Notice 201/21A and the EC Council Directive 98/80 EC to harmonise the regulation between the UK and the of the EU.

 

VAT on Silver

Silver bullion is taxable at 20 %. Therefore, you need to be mindful that prices need to go up in order for you to make a profit. With this said it is best to buy when silver price is relatively low compared to gold.

If you are a professional business and you have to reclaim the VAT back, then the VAT rate will not make any difference. If you consider to do so, consider speaking with an accountant before making a purchase.

Please note that Gerrards cannot make any reassurances that you will be able to claim the VAT back.

What is "Investment Gold" ?

The UK Government's website classes investment gold as :

  1. Gold of purity not less than 995 thousandths that is in the form of a bar, or a wafer, of a weight accepted by the bullion markets.
  2. A gold coin minted after 1800 with the following features:
    • a purity of not less than 900 thousandths
    • has been, legal tender in its country of origin
    • sold at a price not greater than 180 % of the value of its fine gold content
  3. An investment gold coin as specified in Notice 701 / 21 A Investment gold coins.

A list of qualifying gold coins is published by the European Commission in December each year to ensure consistency across the EU. The UK duplicates this in Notice 701/21A, alongside an additional list of gold coins accepted by the UK as qualifying for exemption.

 

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