The future of silver, VAT and import charges into the UK now a Deal has been done!?

[BackyardBullion]

7 minutes ago, silversky said:

It's more onerous for international business which is smaller than £135 in value for sure but larger than that essentially nothing.

What is of more interest to me is how long the boogers will take to clear items through customs /duty etc.  The place they currently have with the American sounding name (Langley) which deals with imports takes a good 7-10 days to clear them.  I've had two parcels from the states stolen over the years inside that facility (missing without trace) and it's clearly no good.  I want to see changes from that.

I think many many parcels will get "lost" in a pandemic with additional red tape. Not a good time to be importing precious metals

[HerefordBullyun]

5 minutes ago, BackyardBullion said:

I think many many parcels will get "lost" in a pandemic with additional red tape. Not a good time to be importing precious metals

I tried to book a courier online through various websites and none I could execute a laptop to be shipped from Latvia to UK. This was for one my blokes who I manage who works remotely for my team. None of the courier's have anything sorted and I suspect nothing for at least a month, then you'll have backlogs. All I was getting was errors I spent 5 hours trying to rectify and still no good.

My advice is don't even attempt to buy or send anything from outside of UK as it stands. This is going to take a while to sort out.

Absolute waste of my day.

Edited January 4, 2021 by HerefordBullyun

[silversky]

1 hour ago, BackyardBullion said:

I think many many parcels will get "lost" in a pandemic with additional red tape. Not a good time to be importing precious metals

No point importing precious metals now.  We've been locked out of the cheap silver loophole until we can persuade our supposedly "fiscal conservative" government that charging British citizens more than anyone else in the world to own our own Royal mint legal tender is perverse.  I believe it may be possible to do this.  There is a case now to show that the Royal Mint will suffer a loss of business and that British Citizens will also suffer the loss of the ability to save in Silver competitively.  Such a case might eventually get debated in a new bill somewhere down the bottom of the list in a year or so from now.  But write to your Tory MP if you want it to happen.  Moaning here will make no difference.  The key is to emphasise that Tories support individuals saving for themselves ideologically.  They all know they do which is why this is the best approach. 

Edit: ask your Tory MP to pass your letter on to Rishy for his consideration.  He has a close relationship with the mint and may view their continued good business as valuable.  Point out that almost all silver in the EU is traded at greatly reduced or zero VAT for European citizens and that until the 1st almost all Royal Mint Silver bought by British Citizens has been bought under this scheme.  It is simply wrong for British Citizens to pay the most for their own legal tender.

Edited January 5, 2021 by silversky

[Martlet]

8 hours ago, silversky said:

Edit: ask your Tory MP to pass your letter on to Rishy for his consideration.  He has a close relationship with the mint and may view their continued good business as valuable.  Point out that almost all silver in the EU is traded at greatly reduced or zero VAT for European citizens and that until the 1st almost all Royal Mint Silver bought by British Citizens has been bought under this scheme.  It is simply wrong for British Citizens to pay the most for their own legal tender.

Suggest that highlighting a tax avoidance loophole is not the best argument. Nor is making claims without evidence - do you know how much Royal Mint sells through Europe?  The case to make is the simple one on legal tender and secondly that silver bullion should be treated same as gold or other investments, and made exempt from VAT.

[HighlandTiger]

This whole thread can be boiled down to people moaning that the UK hasn't continued a tax loophole found in one tiny country in the EU. 

People buying coins, is never going to be high on the Governments list of things to do. For every person on here who knew about and used the loophole there are a hundred people buying silver with 20% vat on it without batting an eyelid.  

Perhaps instead of whinging about how you cant avoid tax on something anymore, (you pay it on everything else), just change your stacking strategy. There is plenty of VAT free silver out there, in fact there are thousands of tons of VAT free silver waiting to be bought in the UK right now. It's called flatware.

[Pete]

2 hours ago, HighlandTiger said:

This whole thread can be boiled down to people moaning that the UK hasn't continued a tax loophole found in one tiny country in the EU. 

Sorry but I have to disagree with this - 

You are referring to Estonia, I assume, where up until recently silver coins sold by the European Mint were VAT free.
The prices charged by the E.M. however were not always competitively priced against GS.be and others.
From my own experience I probably purchased 20 times the value from GS.be than from the E.M.

GS.be and many others, mostly in Germany, sold some ( but not all ) of their silver coins at a much reduced amount of VAT - which is not a lower VAT rate.
The VAT in Germany for example is 19%.
These companies used the differential VAT scheme which meant they added full VAT on a lesser value.
There is absolutely no reason ( prove me wrong please ) why our main bullion dealers in the UK could not do exactly the same.

The same applies to the much more expensive Platinum so there is a strong argument to either remove the VAT on Platinum as a relatively rare precious metal or add VAT to Gold. I do not see why gold should be treated any differently to Platinum when sold as an "investment" product. The differential VAT method does seem fair however and that should apply to all precious metals used sold as investment products and not raw material. That is possibly one reason why silver bars were not eligible for the reduced VAT in Germany several years ago whilst coins and coin bars were.

[LoveThemCoins]

Surely a lot of the companies importing into the UK have done well by evading UK VAT on a massive scale.

Is it not good that the VAT man can now charge the appropriate tax on imported goods, levelling up the playing field for domestic retailers?

 

[BackyardBullion]

1 minute ago, LoveThemCoins said:

Surely a lot of the companies importing into the UK have done well by evading UK VAT on a massive scale.

Is it not good that the VAT man can now charge the appropriate tax on imported goods, levelling up the playing field for domestic retailers?

 

I agree that promoting buying British is good. But lets be honest, our bullion dealers are not the cheapest by any means and are uncompetitive even without VAT. So many other products also are not very easily made in the UK and to have the rest of the world not want to sell to us is not good for British businesses that have supply chains outside the UK.

Ultimately we are an island with finite resources, there are not a lot of products and businesses that can only use materials and goods sourced in Britain. At some point in nearly every supply chain we need imports. 

[LoveThemCoins]

2 minutes ago, BackyardBullion said:

I agree that promoting buying British is good. But lets be honest, our bullion dealers are not the cheapest by any means and are uncompetitive even without VAT. So many other products also are not very easily made in the UK and to have the rest of the world not want to sell to us is not good for British businesses that have supply chains outside the UK.

Ultimately we are an island with finite resources, there are not a lot of products and businesses that can only use materials and goods sourced in Britain. At some point in nearly every supply chain we need imports. 

Sorry, if tax is due tax should be collected. 

[BackyardBullion]

Just now, LoveThemCoins said:

Sorry, if tax is due tax should be collected. 

Yes, I totally agree. But why force all small businesses all over the world to register with HMRC and file quarterly VAT returns even if they have only one or two sales to the UK.

We are already seeing many companies around the world flat out refuse to ship to the UK because the added burden of VAT registration in the UK is too much for them to handle. 

That is what stifles imports to the UK and will ultimately make the UK consumer pay in either additional costs on the product (which by the way means relatively more tax too - higher unit costs mean more VAT is applied) or inferior products. 

[LoveThemCoins]

14 minutes ago, BackyardBullion said:

Yes, I totally agree. But why force all small businesses all over the world to register with HMRC and file quarterly VAT returns even if they have only one or two sales to the UK.

We are already seeing many companies around the world flat out refuse to ship to the UK because the added burden of VAT registration in the UK is too much for them to handle. 

That is what stifles imports to the UK and will ultimately make the UK consumer pay in either additional costs on the product (which by the way means relatively more tax too - higher unit costs mean more VAT is applied) or inferior products. 

Taxation is agreed upon by our elected representatives.

I would prefer to live in a tax-free system but society depends upon it.

Now we have the opportunity to elect MPs with a mandate to change the tax system to what we want rather then what is dictated to us.

Use your vote wisely!

[BackyardBullion]

10 minutes ago, LoveThemCoins said:

Taxation is agreed upon by our elected representatives.

I would prefer to live in a tax-free system but society depends upon it.

Now we have the opportunity to elect MPs with a mandate to change the tax system to what we want rather then what is dictated to us.

Use your vote wisely!

I think the chances of taxes being changed for the benefit of the wealthy will not be happening any time soon - for that matter I don't think we will see the reduction of taxes any time soon at all. 

[silversky]

10 hours ago, Martlet said:

Suggest that highlighting a tax avoidance loophole is not the best argument. Nor is making claims without evidence - do you know how much Royal Mint sells through Europe?  The case to make is the simple one on legal tender and secondly that silver bullion should be treated same as gold or other investments, and made exempt from VAT.

I don't believe that I'm making a claim about the Royal Mint selling a lot of silver through Europe without evidence.  It may be circumstantial but I simply don't believe that it's possible that there are any large buyers of physical silver in the whole of Europe (including the UK) who didn't know that the German dealers are the cheapest.  None.

If we start with the rich, they aren't foolish or naïve enough not to compare costs across the channel.  They didn't get rich by being lazy and not bothering to do a simple price comparison, and they don't tend to invest large sums of money without doing a bit of research first.  Most medium and small investors receive some form of investment advice either from a professional or in the form of a magazine such as moneyweek.  Not a month goes by without moneyweek making some reference to precious metals with a reminder to look abroad to secure silver at the correct price.

Perhaps there are a few people who start out spontaneously and make a few small purchases, but they very quickly find this forum or a facebook page or even reddit and are alerted to the price difference.  This is why it is highly likely that the bulk of Royal Mint silver bought all over Europe (including the UK) has been bought under German differential VAT schemes or through Estonia VAT free.

The simple truth is that Germany runs the European physical Silver market and that is NOT an accident!   It was captured by design and was UK short sightedness that allowed the situation to develop.  Germany deliberately allows the so-called loophole differential scheme, whilst enforcing an EU wide blanket requirement for everyone else to charge VAT at standard rates.  Estonia's politicians already capitulated to this requirement ages ago and it's just about timing their implementation.  It may now already have taken place but there is no move to close down German dealers and their 'loophole'.  Until we left the EU there was no way ever that we would be granted the right to copy Germany.  The whole purpose of that 'loophole' was to drive bullion business to German shores.  Different nations were granted different economies by the EU.  France and Italy have been granted agriculture which is why every workaround and incentive is geared towards serving them.  It's no coincidence that Germany has the high tech, automotive, bullion and finance markets.  This is the high end stuff and it reflects their status as the senior partner within the EU.

Now that we're out of this silly central planning scheme it would be wise of our government to abandon this disincentive mechanism because it no longer drives our business towards the German dealers as intended.  Instead it now applies a tax which no one ever paid which will damage our Royal Mint.  Applying a 20% tax to the market overnight will definitely reduce demand inside the UK.  I don't care what anyone says, applying a 20% upfront tax to a market overnight has a definite chilling effect.

British residents are the big buyers of (higher than standard bullion premium) Royal Mint products because of the CGT benefit which they confer.  But, it's a lure because you have to be a big buyer for this to be of much benefit and paying 20% tax upfront kind of takes the shine off that.  I foresee the Royal Mint scaling back their product lines in Silver as many British residents look to invest elsewhere.  It costs a lot of money to go through the set up for new products and why would they bother if half of their market finds something else to invest in such as bitcoin.

Now it's certainly true that some Americans, Europeans and Asians (also Ozzies) like to buy a few interesting Royal Mint products (which come at higher premiums lets not forget), but I do not believe that the bulk of their stacks are made up of Royal Mint products.  Why would they be?  There is no CGT relief for foreign residents and so no incentive to pay the higher premiums.  Ounce for ounce, it's usually better to buy the cheapest ounce you can.

The argument that many will switch to Royal Mint gold certainly does hold water.  However, even the smallest piece of bog standard gold is rather expensive these days for many people.  Clearly some people will continue to buy Silver and pay their tax upfront, some will make the switch to gold but many will simply find other things to invest in which aren't taxed upfront.  Tax upfront makes an investment very unappealing.  It will definitely result in a loss of sales for the Royal Mint which is why the smart thing for our government to do now would be to match the German margin scheme.  We no longer have to comply with driving business over to Germany and so the messed up disincentive to our market should be abolished.

For anyone that doubts that Germany is the major player in the physical bullion market I suggest a look at this German bullion dealer comparison site "gold.de".  Select any silver coin that you want and the sheer number of silver dealers listing it in Germany makes it quite apparent.  No one in Europe pays full VAT and most British residents won't either.  They will simply stop buying Royal Mint silver and the mint will be forced to mothball some of it's product lines.

[LoveThemCoins]

8 minutes ago, silversky said:

I don't believe that I'm making a claim about the Royal Mint selling a lot of silver through Europe without evidence.  It may be circumstantial but I simply don't believe that it's possible that there are any large buyers of physical silver in the whole of Europe (including the UK) who didn't know that the German dealers are the cheapest.  None.

If we start with the rich, they aren't foolish or naïve enough not to compare costs across the channel.  They didn't get rich by being lazy and not bothering to do a simple price comparison, and they don't tend to invest large sums of money without doing a bit of research first.  Most medium and small investors receive some form of investment advice either from a professional or in the form of a magazine such as moneyweek.  Not a month goes by without moneyweek making some reference to precious metals with a reminder to look abroad to secure silver at the correct price.

Perhaps there are a few people who start out spontaneously and make a few small purchases, but they very quickly find this forum or a facebook page or even reddit and are alerted to the price difference.  This is why it is highly likely that the bulk of Royal Mint silver bought all over Europe (including the UK) has been bought under German differential VAT schemes or through Estonia VAT free.

The simple truth is that Germany runs the European physical Silver market and that is NOT an accident!   It was captured by design and was UK short sightedness that allowed the situation to develop.  Germany deliberately allows the so-called loophole differential scheme, whilst enforcing an EU wide blanket requirement for everyone else to charge VAT at standard rates.  Estonia's politicians already capitulated to this requirement ages ago and it's just about timing their implementation.  It may now already have taken place but there is no move to close down German dealers and their 'loophole'.  Until we left the EU there was no way ever that we would be granted the right to copy Germany.  The whole purpose of that 'loophole' was to drive bullion business to German shores.  Different nations were granted different economies by the EU.  France and Italy have been granted agriculture which is why every workaround and incentive is geared towards serving them.  It's no coincidence that Germany has the high tech, automotive, bullion and finance markets.  This is the high end stuff and it reflects their status as the senior partner within the EU.

Now that we're out of this silly central planning scheme it would be wise of our government to abandon this disincentive mechanism because it no longer drives our business towards the German dealers as intended.  Instead it now applies a tax which no one ever paid which will damage our Royal Mint.  Applying a 20% tax to the market overnight will definitely reduce demand inside the UK.  I don't care what anyone says, applying a 20% upfront tax to a market overnight has a definite chilling effect.

British residents are the big buyers of (higher than standard bullion premium) Royal Mint products because of the CGT benefit which they confer.  But, it's a lure because you have to be a big buyer for this to be of much benefit and paying 20% tax upfront kind of takes the shine off that.  I foresee the Royal Mint scaling back their product lines in Silver as many British residents look to invest elsewhere.  It costs a lot of money to go through the set up for new products and why would they bother if half of their market finds something else to invest in such as bitcoin.

Now it's certainly true that some Americans, Europeans and Asians (also Ozzies) like to buy a few interesting Royal Mint products (which come at higher premiums lets not forget), but I do not believe that the bulk of their stacks are made up of Royal Mint products.  Why would they be?  There is no CGT relief for foreign residents and so no incentive to pay the higher premiums.  Ounce for ounce, it's usually better to buy the cheapest ounce you can.

The argument that many will switch to Royal Mint gold certainly does hold water.  However, even the smallest piece of bog standard gold is rather expensive these days for many people.  Clearly some people will continue to buy Silver and pay their tax upfront, some will make the switch to gold but many will simply find other things to invest in which aren't taxed upfront.  Tax upfront makes an investment very unappealing.  It will definitely result in a loss of sales for the Royal Mint which is why the smart thing for our government to do now would be to match the German margin scheme.  We no longer have to comply with driving business over to Germany and so the messed up disincentive to our market should be abolished.

For anyone that doubts that Germany is the major player in the physical bullion market I suggest a look at this German bullion dealer comparison site "gold.de".  Select any silver coin that you want and the sheer number of silver dealers listing it in Germany makes it quite apparent.  No one in Europe pays full VAT and most British residents won't either.  They will simply stop buying Royal Mint silver and the mint will be forced to mothball some of it's product lines.

I assume you are basically saying tax evasion is rife.

[Pete]

11 minutes ago, LoveThemCoins said:

Taxation is agreed upon by our elected representatives.

I would prefer to live in a tax-free system but society depends upon it.

Now we have the opportunity to elect MPs with a mandate to change the tax system to what we want rather then what is dictated to us.

Use your vote wisely!

My advance apologies as this is now moving off topic but a response is merited -

Unfortunately in many instances your choice of MP is either the monkey or the organ grinder, neither of which is suitable.
Your choice is red or blue and other colours have little prospect of making any noticeable changes.
I don't recall if it was Singapore or Hong Kong a couple of generations ago, abolished all tax so whatever your earned you kept.
The other side of the coin however was that nothing was free - you paid for kids education, health, no welfare etc.
No freebies and no cash for sitting on your arse all day watching TV expecting someone else to feed you, raise your kids and pay your bills.
In some countries in the EU if you get ill and are in hospital you pay a daily rate for your bed and you need to order in food or have a partner or friend bring food for you.
I know of someone undergoing daily chemo that lives in his car, parked in the hospital carpark rather than pay for a bed.
Too many things in the UK are free and consequently abused but have to be paid for by taxing everyone to the hilt either through PAYE or VAT.

[LoveThemCoins]

1 minute ago, Pete said:

My advance apologies as this is now moving off topic but a response is merited -

Unfortunately in many instances your choice of MP is either the monkey or the organ grinder, neither of which is suitable.
Your choice is red or blue and other colours have little prospect of making any noticeable changes.
I don't recall if it was Singapore or Hong Kong a couple of generations ago, abolished all tax so whatever your earned you kept.
The other side of the coin however was that nothing was free - you paid for kids education, health, no welfare etc.
No freebies and no cash for sitting on your arse all day watching TV expecting someone else to feed you, raise your kids and pay your bills.
In some countries in the EU if you get ill and are in hospital you pay a daily rate for your bed and you need to order in food or have a partner or friend bring food for you.
I know of someone undergoing daily chemo that lives in his car, parked in the hospital carpark rather than pay for a bed.
Too many things in the UK are free and consequently abused but have to be paid for by taxing everyone to the hilt either through PAYE or VAT.

I agree with everything you have said. People get the MPs they deserve.

[Pete]

14 minutes ago, silversky said:

I don't believe that I'm making a claim about the Royal Mint selling a lot of silver through Europe without evidence.  It may be circumstantial but I simply don't believe that it's possible that there are any large buyers of physical silver in the whole of Europe (including the UK) who didn't know that the German dealers are the cheapest.  None.

If we start with the rich, they aren't foolish or naïve enough not to compare costs across the channel.  They didn't get rich by being lazy and not bothering to do a ....

The larger investors will keep their silver vaulted meaning they haven't had to pay VAT so don't worry about it.
If our Royal Mint issues 1 million ounces of a silver coin I cannot see members of the silver forum purchasing collectively much more than 1% or possibly substantially less so their business will not be affected. We are perhaps only in the noise part of their sales spectrum.

[silversky]

 

3 minutes ago, LoveThemCoins said:

I assume you are basically saying tax evasion is rife.

What?  No.  No one has evaded any tax.

The disincentive mechanism was to drive bullion markets to Germany and it worked well.  Everyone bought their silver in Europe.  My monster boxes (preordered) arrived two weeks after the Royal Mint release date having been shipped from Heathrow to New York to Frankfurt before making their way by road to Estonia and then being trucked back into the UK.  The whole market is doing the same or similar.  It's not a secret to any government and it was entirely sanctioned because it supported German dealers.  It was a deliberate action to give the bullion business to Germany.  Simple.

[Martlet]

25 minutes ago, LoveThemCoins said:

I assume you are basically saying tax evasion is rife.

Avoid dear chap. And yes it is.

[silversky]

8 minutes ago, Pete said:

The larger investors will keep their silver vaulted meaning they haven't had to pay VAT so don't worry about it.
If our Royal Mint issues 1 million ounces of a silver coin I cannot see members of the silver forum purchasing collectively much more than 1% or possibly substantially less so their business will not be affected. We are perhaps only in the noise part of their sales spectrum.

I agree that some will switch to vaulted.  But many won't.  I know of a number of people who lost hundreds of thousands of pounds when a precious metals vaulting firm turned out to be empty.  People are naturally a little cautious over these schemes.  I'm not planning on buying into any of them myself.

[ShropshireTom]

Hello all,

For everyone’s information and hopefully of some use:

I ordered some 2020 1oz Libertads mid December from Germany, they were packaged and sent to DHL the same week (W/c 14th Dec). They were then held up and I had a note from DHL apologising for the delay which meant it didn’t move for the rest of that week. By W/c 21st nothing was moving because of the virus.

Just had an email from Royal Mail today telling me it will likely incur a customs charge because of the value.

I will be trying to reclaim as it was purchased in December and I can prove it. Thought I’d share as a flavour of things to come in the hood somebody finds the info useful.

[BackyardBullion]

2 hours ago, ShropshireTom said:

Hello all,

For everyone’s information and hopefully of some use:

I ordered some 2020 1oz Libertads mid December from Germany, they were packaged and sent to DHL the same week (W/c 14th Dec). They were then held up and I had a note from DHL apologising for the delay which meant it didn’t move for the rest of that week. By W/c 21st nothing was moving because of the virus.

Just had an email from Royal Mail today telling me it will likely incur a customs charge because of the value.

I will be trying to reclaim as it was purchased in December and I can prove it. Thought I’d share as a flavour of things to come in the hood somebody finds the info useful.

Just be sure that email is not a scam, lots of email scams going around - also, why are royal mail emailing you instead of DHL?

[Rll1288]

Although not PM related it does show how things could go... I ordered a part for a 3d Printer from a company that was based in Netherlands. Just got an email back saying "sorry we don't have the right permissions and documents yet to ship to the UK" so will be processing a refund. Although I am assuming that on PM's (due to the type of contract) this wouldn't happen. It may however delay things considerable

Edited January 6, 2021 by Rll1288

[Connor]

44 minutes ago, Rll1288 said:

Although not PM related it does show how things could go... I ordered a part for a 3d Printer from a company that was based in Netherlands. Just got an email back saying "sorry we don't have the right permissions and documents yet to ship to the UK" so will be processing a refund. Although I am assuming that on PM's (due to the type of contract) this wouldn't happen. It may however delay things considerable

I reckon that this is going to be a general theme for maybe a year to eighteen months, and then things will settle down once everyone finds their feet. It was always going to be messy leaving the EU but especially in the middle of a pandemic. On another note, if you get that printer part, what's the chances you can print some sovereigns?😂🍻

[Rll1288]

1 hour ago, Connor said:

I reckon that this is going to be a general theme for maybe a year to eighteen months, and then things will settle down once everyone finds their feet. It was always going to be messy leaving the EU but especially in the middle of a pandemic. On another note, if you get that printer part, what's the chances you can print some sovereigns?😂🍻

I have been trying hahaha.... nearest I could get was a round with copper filament...