Has Brexit Killed off silver stacking in the UK?

[Roy]

2ozs of gold silly!

[AppleZippoandMetronome]

6 hours ago, sixgun said:

The insane premiums occurred when silver market blew up in March 2020. We have discussed this before. You can buy silver on the forum for considerably less than spot + £10, you just have to look.

I remember it well. I was very fortunte to have been sat at the computer when silver dived down below £10/oz in March 2020. I put in two orders that morning. One with the BYB group order and then another seperate one with the EU mint when I quickly realized we wouldn't likely see prices like that again so it was worth going all in. Then of course the shortages and increased premiums followed.

You can certainly find great deals on the silver forum if you're lucky enough to be on when those deals are posted. I don't have as much spare time as I did a few years ago so for me its just not any reliable way to buy since the deals are usually long gone when I get on here to look. For me gold just makes the most sense when I can buy it at decent prices more or less whenever.

[SidS]

19 hours ago, Shinus73 said:

I think it’s psychologically difficult for those who were used to the low VAT associated with buying from the EU to pay the additional tax + import duty.

Certainly the case for me.

Perhaps it's this in a nutshell. I've never bought silver from the EU, always bought either domestically or from a contact in the US. All was second hand and junk silver.

So I'm still stacking like I ever was.

Edited May 29, 2022 by SidS

[blackadder]

3 hours ago, AppleZippoandMetronome said:

I remember it well. I was very fortunte to have been sat at the computer when silver dived down below £10/oz in March 2020. I put in two orders that morning. One with the BYB group order and then another seperate one with the EU mint when I quickly realized we wouldn't likely see prices like that again so it was worth going all in.

I wish i'd have bought far more back then to  

[SidS]

17 hours ago, TeaTime said:

I would switch to generic gold but it only seems like yesterday that i was buying sovereigns for £60 a pop. I can't get over the relatively rapid increase in gold and i see little value in purchasing at circa £1400-£1500 an ounce...

This is it for me. Every former sovereign I bought (minus the shield Vicky's) were well under £100 each, as you say many were mostly in the £58-£65 range. I just can't stomach paying £300+ for one... ONE!

I feel about that like you guys moving away from silver do about the sudden VAT increase. Sorry but at £300 or more a coin I'd be wanting hammered gold and guineas, not run of the mill George V and Gillick sovereigns.

[sixgun]

Time and tide wait for no man. Things move on. i remember having two half crowns for my week's dinner money. So a full school dinner was a shilling a day - 5p a dinner. The price of food has gone up so much since then. Lucky for me i've got passed that and i'm still eating.

[TeaTime]

The price of gold has doubled in the last 6 years and i don't believe todays prices are sustainable or good value for long-term investment. Comparing the massive recent upturn in gold prices to food inflation is disingenuous and, quite frankly, myopic.  

Gold is something of a 'panic' commodity and typically trends upwards when uncertainty and fear are the prevailing mood....   

[Pete]

Before you can say gold has doubled or 'back in XYZ' I could purchase a sovereign for under £100, you must compare to the drop in value of fiat. With all the government QE, currency is worth considerably less that it did, so once this is factored into the feel good factor, gold may only have retained its true value rather than increased based on a devalued currency. Definitely having gold rather than fiat under the bed will have preserved your investment, but looking at prices for stuff today, does it buy much more today than it did when purchased ?

[SidS]

I think gold does buy more today than it did when it was £60 per sovereign, to be honest.

[TeaTime]

£100 fiat in 2002 would have the equivalent buying power of approximately £179 today. £100 invested in gold in 2002, worth £750 today, would convert back to approx £400 in 2002 buying power.

So gold has done remarkably well in those examples - the issue though is, has gold hit it's peak and is it worth investing in at the current high prices ? 

Any investors have to ask themselves - what's driving the large rise in gold value and can it / will it last long term. Personally i don't believe so. Maybe in 10 years when gold has hit £5k an ounce i'll be crying in to my cheap supermarket beer and cursing the day i put all my money into Royal Mail barcoded stamps. 😬

[SidS]

Well I dreamt last night that gold had hit $6000 an ounce, and my first thought was, why hadn't I bought any?

Forget Wonger's prediction. $6000 gold, you heard it here first. Just don't ask me exactly when or how, because like all the YouTube pushers I don't know and my subconscious wouldn't tell me.

😁

[GBStacking]

For me, it's a combination of both, the VAT was always a painful thing to swallow, but a lot of my early stack of silver was all bought in the UK even pre Brexit and has still turned me a nice profit if I was to sell now. However, the VAT coupled with the crazy high premiums that now seem to be the norm has definitely meant that my bullion stack for retirement has changed it's focus pretty much entirely to gold. I do still purchase the odd bit of silver, but these are mostly for gifts for special dates\events or the odd piece where I think a design is pretty enough that i want to own it just to admire and anticipate doing no more than breaking even at best if i had to sell it.

[sixgun]

i just got an email from Celtic Gold. So Celtic Gold looks like they are going to be switching to being a German outfit. Stefan describes what i said about the 7% import VAT in Germany - which is clearly still being applied. Good if you are in the EU or if you wanted a lot of silver and were prepared to do an Eire - N. Ireland - England run. As long as it is for personal use and the silver is carried in personal luggage, i think this is perfectly legal to bring into GB via N. Ireland from Eire. But clearly it is not worth it for a few ounces. 

Dear All,

Thank you all for managing the account re-activation and transition. Given the scope of the system it all went well. We had to push the new system as VAT-free silver in Estonia will end in about 30 days.

The most asked question was: "What is the difference between VAT-free silver and margin scheme taxed silver?"

Answer: The VAT-free product is VAT-free, there is no VAT to be charged onto the product price. Estonia will end the VAT-free scheme on June 30th 2022. After June Estonia will charge 20% VAT onto the product price.

There are several countries in the EU that offer a so called "Margin scheme" when it comes to taxation of silver coins. Margin scheme taxed means there is an importation tax on the silver product and the seller pays regular VAT rate on the margin.

The sale price does not contain VAT and margin scheme taxed silver coins are not linked to any delivery threshold or reporting when it comes to EU shipments.

Germany has the lowest margin scheme for silver coins by ruling a lower import VAT of 7% instead of 19% to 25% as all other countries did.

After Estonia will end, Germany is the cheapest place to get physical silver coins and we are happy to continue to offer lowest rates. You see the full range of silver products already on the celticgold.eu website.

 

[dikefalos]

23 minutes ago, sixgun said:

i just got an email from Celtic Gold. So Celtic Gold looks like they are going to be switching to being a German outfit. Stefan describes what i said about the 7% import VAT in Germany - which is clearly still being applied. Good if you are in the EU or if you wanted a lot of silver and were prepared to do an Eire - N. Ireland - England run. As long as it is for personal use and the silver is carried in personal luggage, i think this is perfectly legal to bring into GB via N. Ireland from Eire. But clearly it is not worth it for a few ounces. 

Dear All,

Thank you all for managing the account re-activation and transition. Given the scope of the system it all went well. We had to push the new system as VAT-free silver in Estonia will end in about 30 days.

The most asked question was: "What is the difference between VAT-free silver and margin scheme taxed silver?"

Answer: The VAT-free product is VAT-free, there is no VAT to be charged onto the product price. Estonia will end the VAT-free scheme on June 30th 2022. After June Estonia will charge 20% VAT onto the product price.

There are several countries in the EU that offer a so called "Margin scheme" when it comes to taxation of silver coins. Margin scheme taxed means there is an importation tax on the silver product and the seller pays regular VAT rate on the margin.

The sale price does not contain VAT and margin scheme taxed silver coins are not linked to any delivery threshold or reporting when it comes to EU shipments.

Germany has the lowest margin scheme for silver coins by ruling a lower import VAT of 7% instead of 19% to 25% as all other countries did.

After Estonia will end, Germany is the cheapest place to get physical silver coins and we are happy to continue to offer lowest rates. You see the full range of silver products already on the celticgold.eu website.

 

Everything right, except the 7% on silver. This was until 2013, we had to pay in general 7% on silver coins. Only coins, no medals, bars, etc. Since 2014 they charge here 19% on everything made of silver, except collectable coins, official currency, worth minimum 250% over spot. But most of german dealers in Germany are using this margin scheme here for silver coins since 2014

[sixgun]

31 minutes ago, dikefalos said:

Everything right, except the 7% on silver. This was until 2013, we had to pay in general 7% on silver coins. Only coins, no medals, bars, etc. Since 2014 they charge here 19% on everything made of silver, except collectable coins, official currency, worth minimum 250% over spot. But most of german dealers in Germany are using this margin scheme here for silver coins since 2014

Germany has the lowest margin scheme for silver coins by ruling a lower import VAT of 7% instead of 19% to 25% as all other countries did.

So are you saying CelticGold is 9 years behind the times? Stefan is actually in Germany - i would have thought he knew the import tax and how he can manage his sales.

They are playing the margin game. This is from Silver-to-go.com. There is no point is using this scheme if there isn't a saving. i can see CelticGold.eu has started using the margin relief scheme. If it is full bore 19% on the silver, there is no point in selling through the margin scheme.

Edited May 30, 2022 by sixgun

[dikefalos]

38 minutes ago, sixgun said:

Germany has the lowest margin scheme for silver coins by ruling a lower import VAT of 7% instead of 19% to 25% as all other countries did.

So are you saying CelticGold is 9 years behind the times? Stefan is actually in Germany - i would have thought he knew the import tax and how he can manage his sales.

They are playing the margin game. This is from Silver-to-go.com. There is no point is using this scheme if there isn't a saving. i can see CelticGold.eu has started using the margin relief scheme. If it is full bore 19% on the silver, there is no point in selling through the margin scheme.

If he says, that there is 7% VAT on silver coins (bullion), so yes, he would be 9 years behind the time. I guess he knows it very well. Why he should use the margin scheme, like for the Brit you showed for example. On your invoice won't be any VAT showen. Almost every dealer in Germany uses this scheme for silver bullion coins, to avoid the 19% VAT. You only pay 7% VAT for silver coins in Germany, if they are official currency and if their value is 250% above spot. The value is set once a year by the ministry of finance. For 2022 631€ / kilo silver applies, so the reduced VAT only applies to coins that cost more than 49.05€ / OZ ex VAT. I tried to find something in english, that's the only one i found.

https://news.bloombergtax.com/daily-tax-report-international/germany-mof-announces-vat-calculation-for-gold-silver-collector-coins

If you search for "Differenzbesteuerung Silbermünzen" you will find many german dealer sides, explaining the margin scheme, just translate them. 

Here is the letter from german ministry of finance from 01.12.2021 for 2022, about which coins are eligible for reduced VAT rate. 

2021-12-01-gold-silberpreis-2022.pdf

But propably we are talking about the same and my english is too bad. So short, there is no 7% VAT on silver coins in Germany, but 19%. Some coins are eligible for reduced VAT rate, but for standard bullion dealers have to use a margin scheme (Differenzbesteuerung). If they buy an OZ for 20€ and sell it for 30€ they have to pay 19% VAT for 10€ (their margin), and do not have to show the 1,90€ on the invoice. 

And again, i guess Stefan knows this very well and could explain it much better in english, than me

[sixgun]

@dikefalos
The margin relief scheme in the UK applies to second hand silver - potentially all second hand silver, including silver bars.
The dealer buys the silver from a customer. VAT has already been paid on the silver when the customer originally bought it - that might have been years before.
The dealer sells the silver as second hand silver on which the VAT has already been paid. VAT is applied to the premium (profit) the dealer charges but not on the actual silver.

There is nothing unique to silver. This could be applied to other items where VAT is applied and are sold second hand to dealers.

When a dealer imports silver into the UK there is 20% VAT applied. There is no point in using the margin relief scheme - there is no benefit.

i see on the website https://www.buygoldonline.io/p/belgium-silver-franc/

Here they say "Collectors and investors can buy Belgium Silver Francs online sales tax and VAT free as the coin is legal tender."

This was my understanding for Germany. That all legal tender silver coins could be sold VAT free (other than VAT on the dealer's profit). You are saying the VAT import loophole was closed in 2013. So all the time the majority of members here have been buying from Germany there was full rate VAT applied. This is despite dealers advertising that they are VAT free. It is on the silver-to-go.com website, Celticgold.eu say in their email they will be able to do this. We could see that silver bars had VAT but silver coins did not have VAT. Now there is either a way round the VAT or these dealers are committing fraud. i had a long discussion with a UK dealer who had taken the matter of VAT on silver to the UK parliament. He has done a lot of research on this subject. It was clear from what he was saying the German (and Belgium dealer) were no charging full rate VAT on the silver coins (legal tender).

Now there is a rule in the UK where the VAT rate on silver coins is 5% - this is for coins of collector value - that is not bullion. The legislation doesn't state a price on the coins as i could see but i know members here have indicated ages and values in the same vein as you.

Now if we look on the goldsilver.be website we can see the cheapest 1 oz silver coin is 23,77 €. This coin is being retailed for less than the spot price of silver + VAT. If goldsilver.be were charging full Belgium VAT 21% - this would be 20,39 € x 1.21 =  24,67 €
This is almost a euro over the retail price of coin on the website. Then of course the mint will want a profit.

For a monster box of Somali Elephants coins work out at 25,04 € - this is a very small margin. Again the mint will want a profit. There is clearly something going on a goldsilver.be and coins are not attracting the full VAT rate. i accept you are only talking about Germany but again i do not believe dealers would advertise their coins are VAT free if there is the full rate of VAT being applied to them. Competitors would complain to the authorities and make them stop.

Edited May 30, 2022 by sixgun

[dikefalos]

@sixgun

This margin scheme dealers in Germany are using, is only good for countries, which have no import taxes for goods from Germany. For sales outside of the EU, you don't have to pay VAT in Germany, so you pay 19% less and pay UK import VAT. If you pay a margin schemed coin, their is no VAT showen, but you paid it. 

Belgium has other VAT rules, than Germany, despite both are EU members. Many german stackers and collectors are buying from goldsilver.be, because for example they charge no VAT on platinum and we have no import tax, because we are both EU members. If i remember right, they also doesn't charge VAT on silver, but not sure about it. 

And the margin scheme is not a loophole, try to translate the letter of germany's ministry of finance

2021-12-01-gold-silberpreis-2022.pdf

Edited May 30, 2022 by dikefalos

[sixgun]

@dikefalos
If i put the Tokelau 1 oz silver BEAR / BULL 2022 coins in my cart and go to the checkout with my (Spanish) address there is no tax charged.
Now i know the IVA rate in Spain is 21%.
Clearly goldsilver.be will be selling 100's of thousands of euros of product. Since July 2021 goldsilver.be should have been charging VAT at the rate of the EU country they are sending to. So that would be 21% Spanish IVA (VAT). The checkout says no tax in my case. i am not in any doubt about the VAT situation - it does not matter what the VAT rate is in Belgium, it is the country you are sending the product to that matters. The chances are a parcel would arrive with me unnoticed by Spanish customs. i think goldsilver.be were putting medical products on parcels in the past. i should probably buy as many of these coins Tokelau coins as i can afford. They are a crazy cheap price. A saying in English is 'Make hay while the sun shines.' [Take advantage of a good situation which is not likely to last.]

Edited May 30, 2022 by sixgun

[dikefalos]

2 hours ago, sixgun said:

@dikefalos
If i put the Tokelau 1 oz silver BEAR / BULL 2022 coins in my cart and go to the checkout with my (Spanish) address there is no tax charged.
Now i know the IVA rate in Spain is 21%.
Clearly goldsilver.be will be selling 100's of thousands of euros of product. Since July 2021 goldsilver.be should have been charging VAT at the rate of the EU country they are sending to. So that would be 21% Spanish IVA (VAT). The checkout says no tax in my case. i am not in any doubt about the VAT situation - it does not matter what the VAT rate is in Belgium, it is the country you are sending the product to that matters. The chances are a parcel would arrive with me unnoticed by Spanish customs. i think goldsilver.be were putting medical products on parcels in the past. i should probably buy as many of these coins Tokelau coins as i can afford. They are a crazy cheap price. A saying in English is 'Make hay while the sun shines.' [Take advantage of a good situation which is not likely to last.]

There where many good offers in the past. And parcels from Belgium won't go through spanish customs, but direct to your home. European Mint was the same, but now they will have to quote VAT. Can't see them no more competetive, if they don't lower their margin. But as long as it goes, buy buy buy.

Edited May 30, 2022 by dikefalos

[MonkeysUncle]

Other than a stack of 1 kilo Beasts (resistance was futile) and a small supply of Krugs from a forgetful* South African gentleman I've avoided silver like the plague since the Government wants to steal 1/5th of my hard earned/ blagged. I'm not funding no parties!

 

* fails to remember diplomatic bags are generally not intended for the transportation of precious metals past otherwise nosy/ theiving customs monkeys.

[MonkeysUncle]

On 29/05/2022 at 17:02, Pete said:

Before you can say gold has doubled or 'back in XYZ' I could purchase a sovereign for under £100, you must compare to the drop in value of fiat. With all the government QE, currency is worth considerably less that it did, so once this is factored into the feel good factor, gold may only have retained its true value rather than increased based on a devalued currency. Definitely having gold rather than fiat under the bed will have preserved your investment, but looking at prices for stuff today, does it buy much more today than it did when purchased ?

I've heard trotted out the wealth preservation argument. Supposedly in Roman times 1oz of gold would buy a quality gents suit. Ditto today. As I can't find any archived web pages from suits-r-us in Roman times and generally can't be arsed to research the claim I've just taken it as read.

 

It's all relative.