What ..... after Brexit for our Silver & Gold ???

[Myblueheaven]

I'm a little confused ( I'm a simple man ) about what will happen after Brexit with our Silver & Gold.

If I'm correct, we will have to pay VAT on silver from Europe making it as expensive as buying in the UK, so GS.be and S2Go will no longer be an avenue to pursue.

So.......

Where will we buy our silver ?

Will we no longer buy Silver from dealers and choose to trade on the pre owned market only ?

Should we buy as much Silver as we can pre Brexit ?

Will this have any effect on buying Gold i.e will it make it even more desirable as people may switch from Silver ?

These may be silly questions to some on here so I am sorry if these have been asked or covered before.

Any constructive advice or opinions much appreciated.

Myblueheaven

 

[Guest]

Assuming for a second we're going towards a hard Brexit, it's not just the VAT that you will have to factor in, but also custom duties, in addition to potential protectionism that either the UK or the EU will want to impose on any transactions. 

But the definitive answer to "what will happen" is: Nobody knows yet. This is all speculation right now. 

[Martlet]

Something to consider is that UK may drop VAT on silver bullion.  Under current EU rules a state isn't allowed to reduce or lower VAT (except for short term).  I wouldn't expect wholesale reduction of VAT, raises alot of tax, but there would be an argument to sync silver (and other metals?) with gold. 

[sixgun]

14 minutes ago, Martlet said:

Something to consider is that UK may drop VAT on silver bullion.  Under current EU rules a state isn't allowed to reduce or lower VAT (except for short term).  I wouldn't expect wholesale reduction of VAT, raises alot of tax, but there would be an argument to sync silver (and other metals?) with gold. 

Where did you get the EU rule that prohibits the UK government reducing VAT? To my knowledge the UK government is free to set the rate, up or down.

http://www.bbc.com/news/uk-politics-eu-referendum-36372660

The rate of VAT on silver in Germany is 19%. The cheaper prices compared with the UK come from the way it is applied. 

i agree it would make sense to zero rate investment silver especially because i could get cheaper silver in the UK. It suspect it would also increase the variety of coins on offer by UK dealers b/c they would have a much higher turnover. This is why i asked the question how many £million of coins are bought outside the UK b/c there are better prices in the EU. Lower taxes on silver might result in more revenue for the Exchequer. 

[HawkHybrid]

I'm going to guess that the price of both gold and

silver from europe is going to go up, at least in the

short term. it's unlikely to be a smooth transition.

even if it was, governments are likely to take

advantage of the impediment to the flow of trade

(perceived or true) as an opportunity to raise more

taxes. with the outlook of possible uncertainty, I

would hold some pre brexit.

 

HH

[Cornishfarmer]

@shortstack68 interesting to hear what the German press are writing about this.       The way the eu tactics are working they aren't trying too hard, so may end up with no divorce  bill to pay

[Martlet]

2 hours ago, sixgun said:

Where did you get the EU rule that prohibits the UK government reducing VAT? To my knowledge the UK government is free to set the rate, up or down.

http://www.bbc.com/news/uk-politics-eu-referendum-36372660

 

I was putting it simplistically for brevity, there's a lot of complex rules around VAT.  The BBC link corroborates the point, saying you need to have agreement with all members to reduce below 15%.  There is then a reduced tier allowed and generally the rules are once VAT rated you cant move to a lower tier or 0 rate.  Big fuss over tampoons recently around this, Brown wanted to 0 rate certain building works too and was told "non". Whether we would, thats another matter, just putting out there an interesting possibility. 

How German apply VAT is curious, on the service (so the markup) and not the bullion. Seems that UK could apply the same but everyone swerves it to avoid complications of distinguishing investment bullion from semi-numismatic etc. 

[Martlet]

35 minutes ago, shortstack68 said:

The thing is, Britain seem to also want to dictate terms of the divorce, in my opinion they think the London stock exchange and banking is the centre of the Universe and they have this as some bargaining chip, but from what i've read (via BBC) that Frankfurt (another banking city) have gained 100,000 jobs from banks that have had enough of the dithering and are moving out of the UK, Frankfurt have allocated a large amount of land for building banks and housing for employees.

The strength of London finance sector is the massive Forex market, derivatives, bonds, commodities, before you get to regular banking and LSE.  International investment likes the UK legal system, so there's a significant legal services sector underpinning it all, and a network effect makes it difficult to relocate without increasing costs of doing business.  The jobs estimate increase for Frankfurt included the services (the estate agents, car salesman, to baristas etc) that goes with a group of high worth people.  Some loss for London, there's banking and other jobs going to Paris, Dublin, Brussels, Warsaw, so that network effect isn't getting transferred to anywhere.

[augur]

9 minutes ago, Martlet said:

The strength of London finance sector is the massive Forex market, derivatives, bonds, commodities, before you get to regular banking and LSE.  International investment likes the UK legal system, so there's a significant legal services sector underpinning it all, and a network effect makes it difficult to relocate without increasing costs of doing business.  The jobs estimate increase for Frankfurt included the services (the estate agents, car salesman, to baristas etc) that goes with a group of high worth people.  Some loss for London, there's banking and other jobs going to Paris, Dublin, Brussels, Warsaw, so that network effect isn't getting transferred to anywhere.

Not fully getting your point. The same way as associated services will increase in Frankfurt, they will get lost in London. The Europeans are paying more income tax than Scottland and Wales combined...

As a matter of fact the European Banks are concentrating their business already back home: Deutsche Bank is relocating staff or not renewing contracts for (some) London employees. Santander will move their main business to Madrid.

Some 10-20% of the business will go to Europe, even American Banks are relocating staff. The bankers don't want to leave since London is a nicer place to be than Frankfurt. But the cost is definitely not a factor: rent, no need for private schools etc. all cheaper so the pay packages will not be smaller. And in terms of network: if passporting will be disallowed, the law firms will also have to relocate some of their staff.

And it's not only the finance sector: the European Medicine Agency will leave and with it also medical research labs, European Research Funds etc. etc.

The established network will not prevent the (partial) exodus. 

[mondy41]

Does anyone think there will be another referendum in say 18/24 months.

UK has been in a property bubble for a while now - personal borrowing through the roof.

How long can this continue.

If you were to listen to the Irish news you would think we were very important even though we have an economy the size of Manchester

It went t@ts up for us and we are still paying. The government introduced a Universal Social Charge which has continued along with other stealt taxes.

I know of people who got mortgages that I would let them do my weekly shopping and when things turned they couldn't pay.

House repositions gone through the roof this year as vulture funds have bought the bad debts from the banks and want people out for a quick return.

Believe me is was very bad here at one stage - suicide figures were crazy,  mostly unreported by the state media.

 

How much different would it be for yourselves if go goes in a similar fashion.

The band is going to stop playing at some stage and will want paying.

Banks will give you an umbrella when the sun is shining and want it back when it's raining.

This is just what I see/read maybe I have it wrong and I don't wish to offend anyone here.

[Pete]

Gold will not be affected and silver imports will attract VAT at the full 20%.

There will not be any import duties on PMs so only the VAT to consider which is presently attractively ( to us fleeced Brits ) based on the loophole of differential VAT after the German rate on coins ( not bars ) was raised from 7% to 19%. Funny how our UK dealers don't use this technique like GS.be and STG.

We investors are not even on the radar when it comes to the volume of silver sales so there will be no incentive for the government to lower VAT.
Silver is an industrial ( whilst considered precious ) metal as is Platinum and both are fully VAT rated.

There is possibly enough coinage in our fellow stackers coffers to satisfy most forum members' future requirements only that the more mature and longer serving stackers are still hurting from the £30 per ounce era. If silver ever rises to those levels there will be sufficient coins coming up for sale.

 

[augur]

7 minutes ago, mondy41 said:

UK has been in a property bubble for a while now - personal borrowing through the roof.

How long can this continue.

I am still wondering if the point is to keep the divorce billl manageable since it seems to be in £ and not in €. 

[Xander]

Pay the EU nothing.

We didn't join the EU, we joined the common market, the EU was foisted on us.

We have already paid in over £400 Billion in the last 40 years, they should be paying us.

[Martlet]

52 minutes ago, augur said:

Not fully getting your point. The same way as associated services will increase in Frankfurt, they will get lost in London. The Europeans are paying more income tax than Scottland and Wales combined...

As a matter of fact the European Banks are concentrating their business already back home: Deutsche Bank is relocating staff or not renewing contracts for (some) London employees. Santander will move their main business to Madrid.

While jobs may be created in Frankfurt, it doesn't follow the same number are lost in London as there's still tens of thousands of high worth people driving that local economy.  Many companies report moving jobs to continent, but its a small fraction of their operations.  Deutsche bank is a good example, its reported they renewed their London office leases a few months ago, not the action of a business moving anywhere.  EU businesses didn't need to set up ops in London for EU based trading in the first place, they setup for access to international markets based here. Those markets aren't dependent on being in the EU, passporting rules or all that, they can (and are) traded anywhere though coalesced into a few financial centres.  If there were a clear centre of business and finance operations in EU there might be a substantial movement of jobs and people, but there isn't, its a fractured affair so the risk to London is greatly overplayed.

[Martlet]

Looking in to it further, i find that gold has only been VAT exempt since EU directive in 1999 to do so, having been originally introduced in 1973 (what else happened in 1973...).  Silver seems to be treated differently by countries due to its primary industrial application, HMRC's position is that silver legal tender is VAT rated so that coins aren't imported to melt down.  

Interesting observation, VAT free silver seems to come from three countries, Germany, one Belgian outlet and couple in Estonian.  Question is are there French, Italian, Spanish, Danish sources and if not is this because they apply VAT (or simply not interested in silver?).

[augur]

My understanding is that VAT should be charged at the going rate at the point of delivery. So the practice of VAT free silver is not fully kosher as the e.g. German MwSt. of 19% should only be deducted to then apply the UK 20% VAT.

In theory HMRC could always bite back and request the unpaid VAT, which they might. 

[sixgun]

Coins are VAT free in Estonia. The others aren't strictly VAT free, i call them low VAT.

This Dutch outlet specifically stating the margin relief scheme is being applied to this product. i am suspicious other coins are being sold under the scheme but they do not specifically say this. If you follow a coin purchase to the checkout it says 0% tax.

https://www.goudpensioen.com/500-gram-andorra-silver-coinbar.html

i am suspicious this outlet in Andorra is tax free. If you go to a Spanish outlet you will find they are applying IVA [VAT], these people say 0% tax.

https://www.andorrano-joyeria.com/en/jewellery/buy-silver

It would be interesting to hear from the UK dealers. Why are there dealers in several EU countries able to sell coins under the margin relief scheme whilst in the UK there is only this benefit where an item is second hand and with some dealers they are still charging VAT.

 

 

[Guest]

4 hours ago, Pete said:

 

There will not be any import duties on PMs 

How can you be sure of that? I don't see any positive outcome out of the Brexit negotiations. What do the WTO rules say about  PM transactions? As silver is considered an industrial metal, I suppose one will have to pay import duties on top of VAT. But, again, you can not give anything for granted. My bet is that there will be no free trade agreement. 

34 minutes ago, shortstack68 said:

Funnily enough, I pay Mwst in silver I buy in Germany, not exactly VAT free, charged at a rate of 19%

Are you buying as a business? 

[Myblueheaven]

Well..... some extremely strong, educated and eclectic opinions.

Makes very interesting reading.

My opinion is that Brexit will happen, its what the majority voted for and whether the powers that be are / have been dragging their feet they must deliver what the country voted for, or it would make a mockery of our way of life , the freedom to vote and have our say.

What happens next, as is obvious by posts on this topic, is that nobody really knows what this will mean for our economy, trade, immigration & laws to name a few.

I have a feeling silver will become harder to buy without added % taxes from Europe but could it mean VAT free silver within the Uk, more in line with gold. I hope so but that won't happen anytime soon.

Good or bad , for Brexit or against there may be some rough seas ahead, we will all have to take the journey, but on the way remember to keep buying that darn silver & gold.

Myblueheaven.

 

[augur]

@savoyard I think I found the explanation for the loophole: https://www.goldsilbershop.de/silbermuenzen-differenzbesteuerung.html

Its in german, so a brief summary: since 1/1/2014 all silver attracts 19% MwSt. (VAT), before coins would atttract 7% but EU law required Germany to raise the silver tax. 

If a german dealer purchases silver coins outside of the EU he only pays 7% import duty and the silver does not acquire VAT. (If the dealer had requested a refund of the import duty he would have to charge the customer 19% VAT).

This loophole will likely be closed in the future irrespective of a Brexit. 

 

@shortstack68 I am not sure if the silver you bought was from within the EU or the dealer wasn't using this (re)import scheme. 

[Guest]

54 minutes ago, shortstack68 said:

No

So how come you have to pay full VAT? I'm asking, because I might be relocating to the continent in the not far future. 

 

Edit: disregard! @augur made it all clear to me. Thanks @augur

[Guest]

Short digression : is there a EU wide political movement or party or lobby which advocates the removal of VAT for silver bullion just like in the USA? Because if there is not any, I'm willing to start one! 

[sixgun]

12 hours ago, augur said:

My understanding is that VAT should be charged at the going rate at the point of delivery. So the practice of VAT free silver is not fully kosher as the e.g. German MwSt. of 19% should only be deducted to then apply the UK 20% VAT.

In theory HMRC could always bite back and request the unpaid VAT, which they might. 

In Estonia silver coins do not attract VAT when sold and delivered locally. If an item is sold and delivered to another EU state the seller should apply VAT prevailing in the state sold into. So silver coins sold and delivered to a UK buyer should have 20% VAT applied. The way Celtic Gold for example gets around this is for the buyer to separately purchase courier services in Estonia. Celtic Gold delivers to the courier in Estonia. Job done, no VAT to pay. The courier then takes the silver to the other EU state but at that point the silver is the personal property of the buyer.

The German dealers are probably quietly doing the same on paper. Technically the silver coins are bought and delivered to a courier in Germany. Job done, German taxes apply. 

[Pete]

If you check the international harmonised codes for import / export you will see that there is no import duty applied on coins whether silver or gold, numismatic, legal tender or otherwise. Leaving the EU will not suddenly see us having to pay import duties on zero rated goods agreed internationally but will end the free movement of goods where VAT has been accounted for in the EU by the seller.

So to summarise - duty is not an issue and is zero today EU and outside the EU.

VAT can be invoiced ( included in the sales price ) in the country of sale e.g. Germany.
The seller can also decide not to charge you VAT but then you are liable to pay VAT when the goods arrive in the UK.
If it is invoiced at a lower percentage than UK VAT then that doesn't matter due to free movement.

Post Brexit the seller will be exporting ( no longer free movement ) and therefore not required to charge VAT so you will have to pay full VAT on import.
 

[sixgun]

31 minutes ago, Pete said:

Post Brexit the seller will be exporting ( no longer free movement ) and therefore not required to charge VAT so you will have to pay full VAT on import.
 

i know someone who has a Dubai company. It is possible to buy silver VAT free. They do not know where you actually take it when you leave the shop.