Why are people stacking Silver over Gold when there is a VAT on silver?

[HawkHybrid]

36 minutes ago, HerefordBullyun said:

Thats in members section hes not a member

more of an excuse than an explanation for purposely going off topic by promoting uranium.

1 hour ago, ksingh said:

Uranium has been performing really well past few months. Stock indicator "uuuu" energy fuels. 

 

should we allow all non members to go off topic with the latest fad?

 

HH

[HawkHybrid]

On 02/10/2021 at 22:05, TeaTime said:

Exactly this.

All the negativity around VAT is on the assumption that you will sell at spot price rather than market value. It's nonsense.

 

on the contrary to it being nonsense. the rate of taxes on potential 'investments' such as silver have

a real impact on return on investment. higher taxes makes it harder for you to pass the costs to a buyer.

assuming that you did find a buyer that is willing to pay all of the higher taxes, your return on investment

would be lower due to needing a higher outlay to make the same returns.(do the detailed maths if you

don't believe me).

 

HH

[sixgun]

Kinesis started paying out the Holders' yield today - a lot of excitement. 
i was please with my payout.
It depends on the activity on the Exchange but people have said it has worked out at 4.5% holders' yield for them. 
So free vaulting, no VAT and 4.5% yield for having your metal in the Kinesis system.

[Roy]

19 minutes ago, sixgun said:

So free vaulting, no VAT and 4.5% yield for having your metal in the Kinesis system.

..and no risk of a nautical mishap!

Nice yield 👍

[Arganto]

On 02/10/2021 at 19:23, sixgun said:

No-one is charging VAT here - so there is no VAT.

I was scratching my head about this vat stuff. I've paid vat on silver once when the price for bars that a dealer casts themselves worked out to be favourable at the time. They'd essentially charged a little less premium which balanced out the vat slightly. Aside from that my post-cheap euro silver has come from the forum. Supply has always been plentiful whether after a few 1oz coins or a boot full of doorstops. No vat to be found.

Premium over spot is a separate issue, but that still applied even when buying from the euro dealers.

 

[HawkHybrid]

13 hours ago, Liam84 said:

Premium over spot is a separate issue, but that still applied even when buying from the euro dealers.

it's actually part of the same issue. (just marketing)

it's like how some dealers give 'free' delivery and others clearly charge for delivery.

 

HH

[Pete]

A point that is missed reading earlier comments is that UK stackers wanting to buy new issue silver cannot avoid paying 20% VAT whereas our own Royal Mint produced silver sells to some European countries for either 0% VAT ( Estonia up until summer ) or the EU dealers are willing to use the differential VAT scheme meaning very low VAT to their customers.
I need multiple 2022 issue coins when they are released but have no choice but to pay 20% VAT to whoever has them for sale.
Stackers in the EU or the USA for example can buy the same coins approximately 20% cheaper.
Buying second hand, for example on the SF, although VAT is not shown as an added tax, it is kind of built-in as silver will sell at the going rate which is higher in the UK than elsewhere for this reason.

[Centauri167]

As I live in Belgium were we have no VAT on silver coins I can buy my silver in the cheapest shop in Europe: Goldsilver.be and without VAT.

That's the only reason I still stack silver next to gold.

The day I have to pay 21% Vat extra on a coin with already a premium around 20-30% I will only stack gold any more.

Silver has potential but starting with a loss of around 50% is crazy, knowing with gold it's around 2-4% over spott.

[HillWalkerDundee]

On 02/10/2021 at 07:52, KevinFlynn said:

  

Taking @Bimetallic's comment, I want to look into the subconsciousness of the silver stacking community...

The UK, Germany, and most of Europe raise a 20+/-% VAT on silver, but not on gold.

So why are we not more aware of VAT? Should the silver section of this largely European forum come with a disclaimer? Should we be on The Gold Forum ?

Why is there even a private silver market in the UK (or Ger

Or would we think that everyone stacking silver is a Maloney follower and is stacking for the large breakout when the gold:silver ratio shoots up to 15:1?

 

I am sure that the 15:1 ratio will return at some point. But unlike Maloney, I think it will be as a result of the price of gold falling rather than the price of silver rising.

[Centauri167]

2 hours ago, HillWalkerDundee said:

I am sure that the 15:1 ratio will return at some point. But unlike Maloney, I think it will be as a result of the price of gold falling rather than the price of silver rising.

Just a question, but why do you think that the ratio will go back to 15:1 ? Which reasons do you see that this will happen ?

 

For me this is a fantasy scenario, a 40:1 ratio I can see happen in the future.

[Bigmarc]

13 minutes ago, Centauri167 said:

why do you think that the ratio will go back to 15:1 ? Which reasons do you see that this will happen

Probably when it's suits America to do so again, same as last time. Wasn't 15 to 1 before the gold standard.

[Centauri167]

1 hour ago, Bigmarc said:

Probably when it's suits America to do so again, same as last time. Wasn't 15 to 1 before the gold standard.

I thought 20:1 but 15:1 is possible.

But that was a complete different time with no real free markets like it is today ...

[Bigmarc]

54 minutes ago, Centauri167 said:

I thought 20:1 but 15:1 is possible.

But that was a complete different time with no real free markets like it is today ...

I think before the gold standard it was 4.25 pound in weight of silver to one ounce of gold, not sur tho, seems to ring a bell. Also had something to do with the word £.

Iscac Newton I think.

Edited January 9, 2022 by Bigmarc

[Dazlenk]

I'm very new to all this and definitely no expert, so at the risk of showing my ignorance I'm going to comment on this subject. I'll use the example of the 500g Baird & Co cast silver bar which I ordered yesterday and am planning on holding for the long term, 15+ years. As long as the price of silver goes up enough during those years (not guaranteed I know) and I sell privately at just under the dealers price (market value) at that time, then I should make some money surely? It's just a gamble.

[KevinFlynn]

9 minutes ago, Dazlenk said:

... am planning on holding for the long term, 15+ years. As long as the price of silver goes up enough during those years (not guaranteed I know) and I sell privately at just under the dealers price (market value) at that time, then I should make some money surely? It's just a gamble.

It is possible, and yes it is a gamble (or call it speculation). Silver bought under VAT will make you turn a profit under the right circumstances. Long term investment horizon is always good, and going to the private market will get you a different buy sell spread.

The general sentiment is that VAT will bite into that profit, especially when buying from and selling to institutional dealers. One can then say that a related investment into gold will have less of that problem.

[HawkHybrid]

1 hour ago, Bigmarc said:

I think before the gold standard it was 4.25 pound in weight of silver to one ounce of gold, not sur tho, seems to ring a bell. Also had something to do with the word £.

Iscac Newton I think.

early 1900's(which is what people usually think when they say it's going back to 15:1) until current day, sgr

was never at or close to 15:1. interchanging old gold and silver coinage doesn't count as it was done by the

standard of the law and not on the basis of metal value. would you swap five coins weighing 6.5g(cupronickel)

each for the weight value of a 8g(cupronickel) coin? but the law says that a 50p(8g) piece is worth five

10p(6.5g) coins. how can 8g = 32.5g by weight if both are exactly the same metal composition?

the sovereign (£1) represent the weight value of one pound of sterling silver(it's why we call it the pound sterling).

the definition of a pound of sterling silver then was different to what it is now. from memory it roughly equates to

a gsr of ~50:1. so in the early 1900's the gsr by weight was ~50:1, which is nowhere near the 15:1 figure that

people like to quote based on the interchanging rate of coinage at that time.

(correction: the only time that it was at/near 15:1 since 1900 was at the height of the hunt brothers cornering of

the silver market in 1980, which lasted less than a year, so is hardly representative of pricing over a 100 year time

frame)

 

HH

Edited January 9, 2022 by HawkHybrid

[HillWalkerDundee]

When I was referring to the 15:1 ratio, it was very much tongue in cheek. On reading back I would agree that it doesn't come across that way. Arch ramper Maloney is always saying that the price of silver will rise to the 15:1 levels which is nonsense. A nice thought but nonsense nonetheless. Maloney never, ever, contemplates the price of gold coming down - a more likely scenario than silver going stratospheric.

[SidS]

Maloney also makes great play on gold doing an accounting for fiat currency issued, great examples from 1933, 1971 and 1980 - however, he never draws attention to the fact that after the spike of 1980 where it rose to match the fiat currency issued, he never mentions the crash which followed that left gold in the doldrums from 1980 through to about 2008. That was some fiat accounting gold did in the 1990s.

[HawkHybrid]

1 hour ago, HillWalkerDundee said:

Maloney never, ever, contemplates the price of gold coming down - a more likely scenario than silver going stratospheric.

 

gold dropping faster than silver to hit the 15:1 gsr is extremely unlikely to happen.

historically a low gsr is a good time to sell both metals. this only really works if both metals have risen

in the lead up to reaching 15:1(with silver rising faster). ie they are both overpriced at that point but

silver more overpriced than gold due to it being more speculative. market sentiment analysis explains

why it has historically happened this way.

for gold to drop more to hit 15:1 and then rise faster than silver afterwards in order achieve something like

20+:1 means that gold needs to be more volatile than silver. and this we know to be uncharacteristic of

how both metals have behaved so far.

 

HH

Edited January 9, 2022 by HawkHybrid

[SilverCH]

The 20% tax is only a killer if selling back to dealers who pay out based on the spot price. If I buy a rare £30 silver coin and then sell it for £100 on ebay 5 years later I don't need to charge VAT as a private seller, premiums are high in the UK but therefore you can also charge the same premium when selling on the private market (hopefully). However due to VAT I don't 'stack' generic bullion silver anymore I try to buy more proof/rare sets that I hope will become more desirable in the future. I prefer silver for collecting on my budget as its more enjoyable owning and hunting for hundreds of interesting proof coin sets compared to a couple of small gold coins!

[ady]

Surely they could make the tax what ever they wanted, but woud not change the actual medium of exchange and value as many TSF members do in buying and selling on the forum.

[SovereignBishop]

On 02/10/2021 at 11:46, Pete said:

I bought a lot of silver from Germany when coins were rated at 7% VAT before rising to 19%.
Then I switched all my purchases to GS.be and some other German dealers that were operating the very low "differential VAT" scheme.
Also I started buying some silver and platinum from Estonia - The European Mint - who were totally VAT free.

You are very fortunate that you still can buy from these two suppliers and avoid the penalties of full VAT.

How does customs view coins bought from the European mint ? Any issues ?

 

I priced up 10 Brits 1oz silver for an exercise and delivered they work out less than £22 per coin. That is for 2022 BU coins. If they add VAT at customs then not so good. 

Edited January 12, 2022 by booboobear

[Pete]

1 hour ago, booboobear said:

How does customs view coins bought from the European mint ? Any issues ?

 

I priced up 10 Brits 1oz silver for an exercise and delivered they work out less than £22 per coin. That is for 2022 BU coins. If they add VAT at customs then not so good. 

Everything purchased from overseas nowadays is subject to VAT.
Although the European Mint can still sell platinum and silver VAT free to all EU countries until summer we are outside of the EU so 20% to the taxman !!
Lovely isn't it ??

On a more positive note it means all buyers across the EU will in 6 months or so have to pay the Estonian VAT unless they adopt the differential VAT scheme other EU dealers use but that doesn't help us in the UK at all.
I really don't follow why a few of our UK primary dealers don't make any attempt to compete but their incentive is reduced because we cannot get round the full VAT here.
Be sure to include the shipping costs from Estonia, 20% VAT plus a broker fee to process the importation and account for your VAT bill.
I have given up even looking at EM prices and if I need new silver or platinum I just pay full price buying in the UK.

 

[SovereignBishop]

Just another example of this government robbing us blind. 

[theman73]

1 hour ago, Pete said:

''Although the European Mint can still sell platinum and silver VAT free to all EU countries until summer''

Any link about this?

Regards

Constantin