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Covid, QE, Brexit - Will VAT be added to gold?


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Hi All,

I know this has been discuss in a round about way but haven't seen anything specifically asking this question with the covid consequences (post a link if I've missed it).

With the inevitable tax rises due to the covid, quantitative easing (QE) government spending and levies (furlough, stamp duty, bounce back loans, extensive borrowing eat out to help out etc etc) coupled with Brexit looming, do you see adding VAT (of any percentage not necessarily 20%) as an easy target? Or am I looking at it too simply? Seems there would be much less uproar than raising income tax, national insurance or business rates. Or is the money they'd raise from this a drop in the ocean?

What are peoples thoughts?

Currently collecting gold pre 2013 Britannia's, sovereigns and family heirlooms

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Plus adding VAT to gold would create a smugglers charter... Best Dicker

Indeed! Also throw this in top of it all. It gets started at 5.45  

Hi All, I know this has been discuss in a round about way but haven't seen anything specifically asking this question with the covid consequences (post a link if I've missed it). With the in

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29 minutes ago, Thelonerangershorse said:

Definitely an easy target, as is removing the CGT exemption from legal tender coins.  :(

That would be a disaster especially for people close to liquidate their pension stack

Currently collecting gold pre 2013 Britannia's, sovereigns and family heirlooms

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32 minutes ago, Martlet said:

Highly unlikely to see anything specific to gold.  A hold of CGT threshold, possibly income tax allowance too.  If Sunak has is sensible he'll go for the higher rate pension relief, £30bn available and not really going to hurt anyone. 

Other than lots of higher rate taxpayers putting money into their pensions - including me, into silver and platinum ETFs in my SIPP....

On VAT on gold - I agree that it's pretty unlikely, but anything's possible.

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At present, investment gold is exempt from VAT across the EU, though after brexit it would be possible for the UK to reintroduce it. VAT is already charged on silver and other precious metals and is supposed to be a broad tax. According to the UK Revenue and Customs website, investment gold is exempt from VAT in order to "place it on the same footing as other investment products, such as stocks and shares". But it still seems to be a strange anomaly: gold jewelry is not exempt, nor are numismatic coins that exceed 180% of the market value of the gold they contain.

That said, there would be only a little to gain from applying VAT to gold coins and bars. Buyers could opt to purchase and store gold outside the country, or they could buy paper instruments. Even if they continued to buy, on a very generous set of assumptions, VAT would only bring in an additional ÂŁ500 million or so.

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23 hours ago, Bumble said:

At present, investment gold is exempt from VAT across the EU, though after brexit it would be possible for the UK to reintroduce it. VAT is already charged on silver and other precious metals and is supposed to be a broad tax. According to the UK Revenue and Customs website, investment gold is exempt from VAT in order to "place it on the same footing as other investment products, such as stocks and shares". But it still seems to be a strange anomaly: gold jewelry is not exempt, nor are numismatic coins that exceed 180% of the market value of the gold they contain.

That said, there would be only a little to gain from applying VAT to gold coins and bars. Buyers could opt to purchase and store gold outside the country, or they could buy paper instruments. Even if they continued to buy, on a very generous set of assumptions, VAT would only bring in an additional ÂŁ500 million or so.

By that definition, VAT should already be applied to all gold and silver coins of value. Can't be right as I don't see HMRC ever passing up a chance to get extra revenue.

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I think this has been covered before, but I think it would create a black market for gold....

There is no way I would buy Gold in the U.K. if VAT was charged, I would simply buy and store in another country.  

I believe in the late 70’s / early 80’s there was a scam where coins were subject to VAT and ingots were not....Lots of coins melted into ingots...Someone with more knowledge than me can confirm but I think this is what John Palmer (Brinks Mat smelter) was doing before he turned his attention to the Brinks Mat loot   

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47 minutes ago, taffybogal said:

So will the buying price of 2nd hand silver in the UK go up in jan 2021?

I think the second hand prices are always in relation to what the prices are in the retail market. Taking away the option of EU dealers with the VAT savings will mean all prices on the second hand market can now only be in relation the the UK market so imo it has to have an impact eventually once people become accustomed to the situation.

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6 minutes ago, Realwealthuprising said:

I think the second hand prices are always in relation to what the prices are in the retail market. Taking away the option of EU dealers with the VAT savings will mean all prices on the second hand market can now only be in relation the the UK market so imo it has to have an impact eventually once people become accustomed to the situation.

I wonder where will be the lowest price new silver in the UK?

 

maybe bullionbypost ?

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They're definitely going to put VAT back on gold, they were forced to take it off by the EU.

It's an easy source of revenue for the government to justify as other precious metals have VAT on them as well as being the 20th century norm.

Edited by GoldStatue
typo
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11 hours ago, Realwealthuprising said:

Commercially.. thats my guess too. Im still able to buy in the EU thankfullyÂ đŸ™đŸ‡”đŸ‡±

We all can still buy from the EU until end of the year.

 

after jan 2021 I will probably buy from bullionbypost.com if there is no obvious better option 

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12 hours ago, GoldStatue said:

They're definitely going to put VAT back on gold, they were forced to take it off by the EU.

It's an easy source of revenue for the government to justify as other precious metals have VAT on them as well as being the 20th century norm.

Nobody forced the UK to remove VAT from gold. The individual member states are responsible for setting their own VAT rules. Simply, VAT is not currently payable on gold in the UK, as it is not classed as an industrial metal, whereas silver, palladium and platinum are.

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15 minutes ago, Shinus73 said:

Nobody forced the UK to remove VAT from gold. The individual member states are responsible for setting their own VAT rules. Simply, VAT is not currently payable on gold in the UK, as it is not classed as an industrial metal, whereas silver, palladium and platinum are.

OK maybe forced was the wrong term to use, the UK would have been at a severe disadvantage with other countries in the EU if they hadn't of harmonized the VAT rules on gold.

Another reason why the government may re-introduce VAT on gold would be to force people to spend and not save. As interest rates are low and look to be low in the long term they may want to make the alternative forms of saving less desirable.

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If the government did add VAT to gold people would most likely buy and sell incognito. People will always get around it and risk it.

That said, a 20% slap of VAT overnight would be disastrous for some bullion dealers working to tight margins.

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Buy older or ancient coins. Bullion will get reamed (if you have to buy or sell in The UK if the current stock of shortminded politicians have their way. Then again, if I was thinking clearly as an independant country, away from  The EU, I would reduce tax on au as it would create a boom in that type of safe haven (amongst a vast array of other finacial services).

That is to say, if you think the UK is screwed, try being European with money.

Edited by Oldun

It’s fun to have fun.

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