Question about Gold and VAT in England

[whuamai]

Hi guys,

 

I am about to bid on some lots from a english auction house.

In the terms it says:

When the lot is sold the buyer shall pay the Auctioneer in full the Hammer Price (plus V.A.T. if payable), together with a premium of 15.00% (excl. of V.A.T.) of the Hammer Price within 14 days of the sale.
 

Iv'e read that investment gold is VAT free in england.

Is all gold VAT free? For example a foreign coin with a price of more than 3 times it's gold value.

 

Is there 20% VAT added on the premium of 15%, which would add up to 18 % total ?

 

Thanks in advance

[CosmikDebris]

When investing in bullion it is important to consider the VAT implications of your purchase. Currently, investment gold is exempt from VAT , this includes all gold bullion bars and coins purchases in the UK and EU. Conversely, silver bullion is subject to VAT, presently at 20% in the UK.

Frequently, due to the VAT free status of investment gold, some investors believe that other precious metals are also exempt. Unfortunately this is not the case, however, this doesn’t mean other metals aren’t worth investing in. Instead individuals should consider the different investment opportunities of each specific metal.

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Why is there no VAT on investment gold?

Since the 1 ^st January 2000 there has been no VAT payable on investment gold. This fell in line with the EC Council Directive 98/80 EC, harmonising regulations between the UK and the rest of the EU.

Additional information about gold and VAT can be found here.

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What is investment gold?

Although investment gold is exempt from VAT this doesn’t apply all forms of the precious metal. As a result, defining what constitutes as investment gold is important. Investment gold is currently;

(a) Gold bars of a fineness not less than 995 of a weight accepted by the bullion markets.

(b) A gold coin minted after 1800 that:

Has a fineness of not less than 900 
Is, or has been, legal tender in its county, an 
Is of a description of coin that is normally sold at a price that does not exceed 180% of the open market value of the gold contained in the coin, or

(c) An investment gold coin as specified in HMRC Notice 701/21A Investment gold coins.

No, you should not have to pay VAT on the gold, but maybe on the  premium 15%. Add 20% to the premium?

[whuamai]

Thank you,

I didnt know the requirements of b).

The coins which I am interested in seem to be handeled as investment coins in the uk.

15% premium +20% VAT sums up to 18% total + shipping costs.

I now can calculate my bids.

Thanks