Premiums!

[JWHocking]

I'm curious to know what everyone's premium limit is when buying gold and silver but more so silver. I have watched a lot of youtube with the likes of backyard bullion and yankie stacking and premiums get brought up all the time. However Yankie mentioned in one of his videos he only buys silver that is below 20% premium. Well here in the UK if you were to buy from a retailer that is VAT registered such as Atkinsons Bullion you are already paying 20% due to VAT. So technically here in the UK the spot price is always going to be 20% higher than it should be as even second hand sellers will still add 20% onto their prices since if you were to look else where you will be paying that in VAT. So when buying off of TSF if the spot price was £19 and someone was selling 1oz of 999 fine Silver for £23.75 would you guys look at it as a 25% premium or a 5% premium?? Obviously Gold doesn't have this issue but I am still curious of what percentage of premium you are willing to pay over spot. 

Edited June 1, 2023 by JWHocking

[HonestMoneyGoldSilver]

Pretty much what Yankee and Silver Dragons said. When spot was £20 my max price for a standard bullion coin (e.g. Britannia) was £25, or 25% premium. Whether we pay the premium in VAT or BBP (BullionByPost) tax, it's the same net result - the premium is what we pay above spot

Perfect condition legal tender bullion in the UK for 20% premium doesn't really exist, a more realistic range is 25-30%. You can buy less than perfect bullion for 20% premium though. Join BYB (BackyardBullion) newsletter you might find deals like that. Sometimes you will find nice bullion coins on TSF for around 20%. If you go for Kilo bars the premium is more like 15% on TSF

The max premium I'll pay is for semi-numismatic Perth Mint items like Kookaburras or RAM (Royal Australian Mint) series, Germania, perhaps KOMSCO too! Come to think of it I do buy premium items. I paid 100% premium on a Kook the other day (1996 limited edition one) and recently I bought 45% premium Kooks. I've also just ordered 55-60% premium Germania items and 65-70% KOMSCO items. My memory is bad. Last week I paid 55% premium on poured silver items and literally yesterday I bought more poured silver at an even higher premium. Got the TSF forum bar, that's quite high premium too like 80%ish inc shipping. So yes on reflection I do pay premiums for items I want and I'll pay 100% 😂 

Premiums suck and on legal tender bullion the VAT is just egregious theft

[JWHocking]

10 minutes ago, HonestMoneyGoldSilver said:

Pretty much what Yankee and Silver Dragons said. When spot was £20 my max price for a standard bullion coin (e.g. Britannia) was £25, or 25% premium. Whether we pay the premium in VAT or BBP (BullionByPost) tax, it's the same net result - the premium is what we pay above spot

Perfect condition legal tender bullion in the UK for 20% premium doesn't really exist, a more realistic range is 25-30%. You can buy less than perfect bullion for 20% premium though. Join BYB (BackyardBullion) newsletter you might find deals like that. Sometimes you will find nice bullion coins on TSF for around 20%. If you go for Kilo bars the premium is more like 15% on TSF

The max premium I'll pay is for semi-numismatic Perth Mint items like Kookaburras or RAM (Royal Australian Mint) series, Germania, perhaps KOMSCO too! Come to think of it I do buy premium items. I paid 100% premium on a Kook the other day (1996 limited edition one) and recently I bought 45% premium Kooks. I've also just ordered 55-60% premium Germania items and 65-70% KOMSCO items. My memory is bad. Last week I paid 55% premium on poured silver items and literally yesterday I bought more poured silver at an even higher premium. Got the TSF forum bar, that's quite high premium too like 80%ish inc shipping. So yes on reflection I do pay premiums for items I want and I'll pay 100% 😂 

Premiums suck and on legal tender bullion the VAT is just egregious theft

I started buying gold and silver back in 2021 and my first coin was a Silver 2021 panda which I love the design of and dont mind that I paid a premium. However I have made a few mistakes in my stack like starting out buying bullion silver from major retailers which packed quite the premium, now I buy all my bullion from TSF as it is a great place for some of the best deals. At some point I think I will buy a couple of high premium items due to their finish and time put into such great products. I wish HMRC would remove VAT on silver just like they did gold it would be so much better. 

[HonestMoneyGoldSilver]

5 minutes ago, JWHocking said:

 I wish HMRC would remove VAT on silver just like they did gold it would be so much better. 

Amen brother

The UK should drop VAT to shove it up the EU. If the UK had 0% VAT and 0% CGT, we'd become the European centre for all things precious metals

[flyingveepixie]

12 hours ago, JWHocking said:

However I have made a few mistakes in my stack like starting out buying bullion silver from major retailers which packed quite the premium,

Common mistake to make for newbies.  I did the same thing, but you live and learn, and usually pretty fast once you find TSF !   That said however, sometimes dealers DO have good offers, and some coins are just irresistible.    I got two Germania Mint Hildegards which came at just about 100% premium, but they're beautiful and there are only 25 000 of them.

Edited June 2, 2023 by flyingveepixie

[stefffana]

I won't talk about the premiums + VAT for brand new silver offered by dealers. I will talk only about the second-hand market from this very active TSF platform, where can be found daily very good deals (I would recommend everyone a premium membership to have instantly access on Buy/Sell section. £5.99/month is nothing if you can save hundreds/month).

In reality it is a false problem for stackers this high premium and I'll try to explain why.

At the moment, good quality bullion coins/rounds are selling second-hand on forum @£25-£26/oz, this meaning @32%-37% premium. Wow! Look very high, isn't it? Even for kilo bars at @£720-£750/kilo is @22%-23.5%.

But when the moment to sell will come, we will sell this silver at the similar prices, so this premium will be fully recovered. If the spot price will be higher in the future, can be made even a decent profit.

So, the range of £25-£26/oz for coins and £22-£23.50/oz for bars is absolutely reasonable in my opinion.

Of course, there are plenty more high premium and highly collectible silver products, but these are more for collectors, not for stackers. Also, there are plenty more 0% premium silver products for those who want to have physical silver at low prices (flatware, old circulated coins, etc.). It is only about individuals/personal stacking strategy and everyone can choose what it is more suitable for him.

 

[FriedrichVonHayek]

12 hours ago, stefffana said:

Also, there are plenty more 0% premium silver products for those who want to have physical silver at low prices (flatware, old circulated coins, etc.). It is only about individuals/personal stacking strategy and everyone can choose what it is more suitable for him.

This has been my strategy for many years as I see no point in paying VAT or dealers premiums.

Just bought some under spot Silver at an auction today, Silver is Silver as far as I'm concerned so I like to buy it as cheap as possible.

However I totally understand why people collect coins as it's a fascinating hobby but buying Silver Bullion it's very difficult to recoup the VAT and premiums.

[PMD]

I paid just under 15 percent premium today for one ounce silver coins, rounds and bars. I paid a 21 percent premium for a vintage ten ounce bar.