Is the secondhand special scheme for silver a scam???

[StackemHigh]

Asking if anyone has seen any proper deals on silver using the secondhand special scheme or is it legitamized scam?

WIthout the TAX of the scheme silver and other precious metals should workout as a proper deal but all i've seen is huge premiums.

[TeaTime]

I've followed a few links on dealers sites to look at the second-hand silver (expecting it to be tax free) only to find minimal reductions in overall price.

I wouldn't call it a scam because a dealer can charge whatever they like - i would call it hugely disappointing, to the point where i no longer bother looking. The special scheme is not tax-free - VAT is still applied to the dealers profit. The trouble with that is if the dealers profit margin is high then there is not a lot of scope for tax savings for the purchaser.

 

 

[TringSilver]

It isn't a scam, the tax is lower but dealers have increased margins to reflect the demand. 

If silver is going for £30/Oz on eBay and every man and his dog are buying it in a frenzy then why would they sell it for £25/Oz or lower.

You could argue that there is a market for a dealer to do said and work on volumes but I haven't seen any pick up the mantle as it were, most dealers in the UK are running out of bricks and mortar shops so have high overheads to cover. 

I think BYB has spoken on this before. There could be a gap for someone to work out of their bedroom and run a lower spread to make money, pay say £21 an Oz and then sell for £25~ if you get enough volumes you could turn a small profit. 

[BackyardBullion]

In addition the amount of admin and legwork that is needed to get an item to qualify for the second hand scheme is high. Businesses that don't do it much or often tend to reflect this in additional premiums to cover their overheads. 

[Wampum]

12 hours ago, StackemHigh said:

Asking if anyone has seen any proper deals on silver using the secondhand special scheme or is it legitamized scam?

WIthout the TAX of the scheme silver and other precious metals should workout as a proper deal but all i've seen is huge premiums.

I can remember phoning up finding out what they had in stock, and going from there, you got your price on second hand they charged their price and the Vat was on the difference.

They posted out your items ,and everything was on the invoice.

I think the internet has killed this. Dealers now call it special margin schemes then charge three times the price of it's value.

I have seen some items at over 300% on special margin schemes which is ridiculous ,especially for something that is in line with bullion, an exception to the rule would be the items of numismatic value.

I understand that there maybe more work involved, however they have bought those items, more than likely below the bullion price on the day, especially if they bought in bulk someone's collection. 

however to then charge two/three time the value, not just Silver, Platinum on the Second Hand market is even worse.

Another thing that seems to happen is that it's not even classed as Second hand and charged with full VAT(which strangely works out cheaper than the Second hand stuff listed),

Coins minted twenty / thirty years ago surely can not be classed a new.

This sort of thing has only really happened over the last ten years or so, and to me is a real bugbear.      

We need a Wetherspoons of the bullion world.😜            

[LawrenceChard]

13 hours ago, StackemHigh said:

Asking if anyone has seen any proper deals on silver using the secondhand special scheme or is it legitamized scam?

WIthout the TAX of the scheme silver and other precious metals should workout as a proper deal but all i've seen is huge premiums.

You should be glad that HMRC decided to allow the secondhand special scheme in the first place. When VAT was introduced in 1973, there was only the Antique Special Scheme*, which was without doubt unfair to anybody buying, selling, or dealing in any secondhand goods which were not antique.

The secondhand special scheme only came into being in 1996.

Of course, it is not a panacea for low prices.

Market prices depend on supply, demand, competition, elasticity (ask an economist), physical location, transport, and quite a few other factors.

No, it is not a scam.

As a simple example, consider that @ChardsCoinandBullionDealer make a market in secondary market one ounce silver bullion coins. About 90+% of the time, we/they don't have stock. I blame this mainly on the silver investors / stackers / customers, who selfishly buy it all within days / hours / minutes of us having any in stock. Perhaps they know something that we don't, such as "we are too cheap". 🙂

* There was also a secondhand car scheme.

[Hunter87]

I stopped buying silver and have never looked back.

Edited July 25, 2021 by Hunter87

[TechSilver]

@Hunter87 Exclusively gold only now?