Importing silver coins and VAT - standard rate or reduced rate?

[arphethean]

It's been discussed before, no doubt, but some clarity would never go amiss and there may be new understanding to be gleaned for some members. There seems to be a lot of questions and confusion around it so can we clear it up once and for all?

What is the situation with importing silver coins into the UK? People tend to automatically say it is charged at the standard rate of 20% as that is the rate for silver, but I have been looking into this, and to clarify the applicable rate you'd need to know what commodity code it falls into in TARIC: https://www.gov.uk/trade-tariff

You could apply the code 7118100000: "Coin (other than gold coin), not being legal tender", which would be 20%.

Or could you class the coin as numismatic? In which case apply a "Collections and collectors' pieces of numismatic interest" code, one of two codes depending on the date of the coin being before 1923 or not:
https://www.trade-tariff.service.gov.uk/commodities/9705310000 
https://www.trade-tariff.service.gov.uk/commodities/9705390000
In this case, it get's a bit more confusing as it lists both the reduced rate of 5% and the standard rate of 20%.

I have found this page which gives info on the reduced rate and leads to this page which seems to imply that you when importing you should declare the value on the customs documents as 25%, which effectively makes the VAT rate 5% FOR CERTAIN ITEMS, and goes on to list the items including:

Quote

Collectors’ items
Collectors’ items eligible for the reduced valuation include products classified under heading 9704 and heading 9705 of the UK Global Online Tariff.

....

Heading 9705 includes collections and collectors’ pieces, such as pieces with any of the following interests:

- ...
- Numismatic

So, assuming I've understood this correctly, and assuming the coins can be argued as being a "collector's piece of numismatic interest", we should legally be able to import them into the UK from any country and declare the value as 25% of its actual value, which will then attract the 20% VAT rate on the reduced valuation and we therefore pay only 5% VAT.

I guess the crucial question is, are bullion silver coins reasonably categorised as a "collector's item" or of "numismatic interest"? I would argue that any coin with a stated face value or traded as a coin with an agreed face value (sovereign, halfcrown etc) regardless of rarity or metal content, is money and therefore numismatic. And they are collector's items if you collect them. Surely?

HOWEVER, when I contacted HMRC they advised as follows:

Quote

From the information supplied, my advice is that the goods would be classified to commodity code 7118900000 under “coin”, the goods would only fall under chapter heading 9705 if they have attained interest by age or rarity, regardless of its monetary value, they may have little intrinsic value but derive their interest from their rarity, grouping or presentation.

 

But this seems very open to interpretation. Where is the line? Take a very real scenario in my position as a China 1oz silver Panda collector. 2023s are mass produced and readily available. Probably not so easy to argue they have "attained interest by age or rarity". 1983s however, definitely have. And there are pandas all the way along that spectrum. 

We are talking about individuals importing, not businesses and margin schemes. No doubt there is a potential long and contentious discussion topic there... Let's leave that.

So IF I AM RIGHT and you are buying from sellers outside the UK and can reasonably argue that your coin is a "collector's item" of "numismatic interest" - get them to state commodity code 9705390000 (1923 onwards) or 97053910000 (older) on their customs form and state the value as 25% of the actual paid price and furnish them with the links provided to show it is the correct procedure.

Back to the original question - can we clear it up once and for all?? Maybe not for bullion coins.

Edited March 17, 2023 by arphethean

[MonkeysUncle]

I am not an expert, and not even in the ballpark of being an expert but here is a cautionary tale.

My personal experience of British customs in the post Brexit world is that they consider British citizens importing items from the EU as lowlife Nazi paedophiles and deem to do whatever they fancy. In my case I USED to import lead acid batteries by the pallet load from a shipper in Rotterdam. My loads typically ended up confiscated in a Birmingham warehouse (despite being landed in Felixstowe!) until several days/ weeks of arguing/ posturing and eventually some financial settlement was made. This despite all paperwork being properly in order given that the supplier was one of the worlds largest battery manufacturers. I now import direct from a distributor in China and my shipments clear through customs with not an eyebrow raised.

Having recently shipped electronics to Greece and Hungary I can attest that the gentlemen in their customs are also dodgy. The Greek officials rob on behalf of the Greek Government and two Hungarian officials of my loose acquaintance have a taste for good Scotch whisky if you catch my drift.

I think you run the risk of being shafted if importing from the EU, but good luck.

I would seriously consider a cheap flight to collect your coin if time/ money make sense and you're talking capsuled gold which can drop into your wallet/ purse.

 

 

[Pete]

I have always used the code 97.05.00.020 when buying premium coins from the USA and Australia.
VAT is 5%
This is for numismatic, collectible coins rather than normal bullion.
I get charged full 20% VAT as border force and couriers seem to ignore the commodity code and automatically charge 20%.
After receipt I file a claim showing photos ( library pictures sometimes from a dealer with price etc ) and the label on the package declaring 97.05.00.020 which has been ignored.
I think this is important so ensure this code is properly shown on the package from your supplier.
Never had a discussion or refusal and received refunded VAT quite quickly.

[bluffer]

throwing another hand grenade into the discussion.  hmrc might argue a mass produced coin ie bullion brit isnt a "collectors' pieces of numismatic interest"

 

But then we have seen an error rotation brit being discovered, which most would strongly argue as numismatic.  

 

So then the question is, if we buy them in sealed tubes, how can we tell if they are errors or not?

 

Schrödinger’s Coin 🤣

[Durzo]

I purchased 20 silver coins from europabullion and the price worked out at £24.50 per coin and that included delivery, insurance and vat, they were 2022 royal mint coins. I live in Northern Ireland so think they were cheaper due to the Brexit deal with Northern Ireland so I didn't have to pay the high premiums.

[arphethean]

On 17/03/2023 at 17:24, bluffer said:

throwing another hand grenade into the discussion.  hmrc might argue a mass produced coin ie bullion brit isnt a "collectors' pieces of numismatic interest"

 

But then we have seen an error rotation brit being discovered, which most would strongly argue as numismatic.  

 

So then the question is, if we buy them in sealed tubes, how can we tell if they are errors or not?

 

Schrödinger’s Coin 🤣

Well why not!! I guess normal bullion is pretty obviously not within the spirit of 9705, but there are definitely grey areas here. But in that example, definitely "potentially" numismatic!!

 

On 17/03/2023 at 16:45, Pete said:

I have always used the code 97.05.00.020 when buying premium coins from the USA and Australia.
VAT is 5%
This is for numismatic, collectible coins rather than normal bullion.
I get charged full 20% VAT as border force and couriers seem to ignore the commodity code and automatically charge 20%.
After receipt I file a claim showing photos ( library pictures sometimes from a dealer with price etc ) and the label on the package declaring 97.05.00.020 which has been ignored.
I think this is important so ensure this code is properly shown on the package from your supplier.
Never had a discussion or refusal and received refunded VAT quite quickly.

Thank you for that. Good to know that appeals are successful and quick. Have you tried declaring the value at 25% in order for the correct charge first time.

[Pete]

19 hours ago, arphethean said:

Well why not!! I guess normal bullion is pretty obviously not within the spirit of 9705, but there are definitely grey areas here. But in that example, definitely "potentially" numismatic!!

 

Thank you for that. Good to know that appeals are successful and quick. Have you tried declaring the value at 25% in order for the correct charge first time.

You mean 5% not 25%

Yes but this has always been totally ignored in my experience.

[arphethean]

30 minutes ago, Pete said:

You mean 5% not 25%

Yes but this has always been totally ignored in my experience.

No I mean 25%. What my research suggests is that the correct way to import it under 9705... is to declare the value as 25% of its actual value, and customs then apply 20% to the declared value.

You buy something for £100. You say on the customs form that it's worth £25. They charge 20% on that (£5). Works out you pay the correct rate of 5%.

A bit weird but according to my gov link that's the way it's meant to be done.

Most sellers might be wary of doing that because they think that postal insurance is somehow linked to customs charges and that the value for both should be the same, when it's of course totally a separate thing, different organisations, different processes.

Edited March 21, 2023 by arphethean

[Pete]

18 hours ago, arphethean said:

No I mean 25%. What my research suggests is that the correct way to import it under 9705... is to declare the value as 25% of its actual value, and customs then apply 20% to the declared value.

You buy something for £100. You say on the customs form that it's worth £25. They charge 20% on that (£5). Works out you pay the correct rate of 5%.

A bit weird but according to my gov link that's the way it's meant to be done.

Most sellers might be wary of doing that because they think that postal insurance is somehow linked to customs charges and that the value for both should be the same, when it's of course totally a separate thing, different organisations, different processes.

What are the risks of getting the ‘value delivered to the United Kingdom’ figure wrong? 

UNDER-DECLARING

If you under-declare the value of your goods, or if you incorrectly claim a preferential rate, you are technically defrauding HMRC, which is a civil infringement. Although you may not be smuggling goods into the UK, you are failing to pay the money owed, and this can attract civil penalties from HMRC.  As strange as it may sound, the worst offences can become criminal prosecutions. 

 

 

[arphethean]

5 minutes ago, Pete said:

What are the risks of getting the ‘value delivered to the United Kingdom’ figure wrong? 

UNDER-DECLARING

If you under-declare the value of your goods, or if you incorrectly claim a preferential rate, you are technically defrauding HMRC, which is a civil infringement. Although you may not be smuggling goods into the UK, you are failing to pay the money owed, and this can attract civil penalties from HMRC.  As strange as it may sound, the worst offences can become criminal prosecutions. 

 

 

I'm not proposing people defraud HMRC!! I am suggesting people follow HMRC's correct procedure as detailed here: https://www.gov.uk/guidance/how-to-value-goods-for-import-vat#reduced-value

[Pete]

On 22/03/2023 at 10:32, arphethean said:

I'm not proposing people defraud HMRC!! I am suggesting people follow HMRC's correct procedure as detailed here: https://www.gov.uk/guidance/how-to-value-goods-for-import-vat#reduced-value

That's very interesting and seems good and proper but how would you make an insurance claim for loss ?
The insurer would surely base any compensation on a declared value so by declaring value to a quarter of its real value could be expensive.

[arphethean]

13 hours ago, Pete said:

That's very interesting and seems good and proper but how would you make an insurance claim for loss ?
The insurer would surely base any compensation on a declared value so by declaring value to a quarter of its real value could be expensive.

I would expect the Insurer would assess the value of the goods with normal methods such as transaction records/invoices/going market rate/price of gold rather than import value declarations. Regardless, if they somehow found out you declared the value of the goods to be 25% of true value it would be a simple matter to explain why you declared that value. 

Edited March 24, 2023 by arphethean