Is Royal Mints legal tender promise worthless?

[Danny-boy]

Seems a reasonable response to me.

[KDave]

Perhaps they should not market them as an exchange of cash for equivalent value if this is not the case. The website offers a '£50 coin for £50' - this is greatly misleading. 

[garthy]

6 minutes ago, KDave said:

Perhaps they should not market them as an exchange of cash for equivalent value if this is not the case. The website offers a '£50 coin for £50' - this is greatly misleading. 

Agreed, it's actually a 1oz silver coin with £50 wrote on it for £50, not a bad mark up if you can get it.

[daz]

Its a bit misleading calling it the "face value range" then isn't it ? They actually advertised the 20 quid coins as £20 for £20.

Ive only got acouple of the twenty quid ones which I I never thought I would be cashing in so I haven't lost out but for the general public who have been taken in its pretty disgusting. And total false advertising

[HawkHybrid]

 

they've amended the product description

http://www.royalmint.com/shop/The_Longest_Reigning_Monarch_2015_UK_20_pound_Fine_Silver_Coin

 

 

I'm not sure it read the same before it sold out.

 

HH

[morezone]

So, the coins are of legal tender but banks are not obligated to accept them but they could if they wished.  But they have then sent out letters asking banks not to accept them.  In which case, they even bother having a face value and designating them legal tender.  If they've been designed solely as collectibles, they should have left off the face value.  What they have done should be illegal.

[StackemHigh]

12 hours ago, morezone said:

So, the coins are of legal tender but banks are not obligated to accept them but they could if they wished.  But they have then sent out letters asking banks not to accept them.  In which case, they even bother having a face value and designating them legal tender.  If they've been designed solely as collectibles, they should have left off the face value.  What they have done should be illegal.

I agree with this totally. Back handed and devious. Letting banks make their own decision not communicating with them would have been the right thing to do. 

False advertising on their website and promotional materials seems to be part of the ROYAL MINTS normal procedures now, between that and their prices any products they produce I'll get from a different supplier. 

Cheaper and I'll be happier! 

[Guest]

They really need to come clean and apologies over this one. VW saw how reputation can suffer so easily and this is pretty much the same level of deceit in my book as VW maybe more so.

If what they have done is not illegal it is certainly right on the edge of acceptability.

If you say you charge 20 for a 20 coin that has to be redeemable for 20 any time.

If I buy one of these coins I cannot get VAT back on export. That means it is treated differently from any other commemorative for tax reasons.

[Pete]

Pasted today from blog.royalmint.com

 

Are £20 coins legal tender?

April 9, 2014 by Dan Oliver

Since its introduction in 2013 there has been some confusion as to whether or not the UK’s first ever £20 coin is actually legal tender, leading to questions very much like those raised about the £5 coin when that was first introduced in 1990.

The simple answer is: “Yes, it is!”. However, we thought we would give you a bit more detail than that.

 

Legal tender has a very specific meaning, in that it defines what can be used as a means to settle debts. If a debtor attempts to pay in court using ‘legal tender’ they cannot successfully be sued for non-payment.

UK coins are regulated by the Coinage Act of 1971. Among many other things, the Act defines the legal tender status of coins as:

Coins of cupro-nickel, silver or bronze shall be legal tender as follows —

(a) coins of cupro-nickel or silver of denominations of more than 10 pence, for payment of any amount not exceeding £10;

(b) coins of cupro-nickel or silver of denominations of not more than 10 pence, for payment of any amount not exceeding £5;

(c) coins of bronze, for payment of any amount not exceeding 20 pence.

So, for example, under the rules of legal tender shops are not required to accept more than 20 pence in 1p or 2p coins – although most will. You can read more on what is and isn’t acceptable under the legal definition of legal tender on our website.

As you can see, there is no mention of the £20 or £5 coin and that is because the Act dates to 1971, when neither coin had been introduced.

So, in order for the £20 coin, and other new coin denominations, to be legal tender the Queen, on the advice of her Privy Council, issued a Royal Proclamation under the Act.

(1B) Other coins, if made current by a proclamation under section 3 of this Act, shall be legal tender in accordance with the provision made by that proclamation or by any later proclamation made under that section.

Thanks to the proclamation the £20 coin, like the £5 coin, and all other United Kingdom coins of the realm, IS legal tender.

However, while it is indeed legal tender, it has not been designed to be used as a circulating coin. This means that while you would be OK to use it in the settlement of a debt in court, for instance, your local shop or bank probably won’t accept it in trade for goods, as the mechanics and systems are not in place to enable that. The highest denomination coin in general circulation today remains the £2 coin, first introduced in 1998.

The £20 coin has been created with the intention of being a commemorative coin, produced in limited editions and sold at face value (£20) to be bought and kept by collectors or someone looking for an affordable, sterling silver memory of a key personal event or occasion.

And this first issue is proving to be hugely popular in that respect, as we are fast approaching sell out with less than 2,000 left as we go to press with this blog post!

So, is it legal tender? Yes.

Is it designed for everyday use in general circulation? No.

Is it designed as a collectible, face-value commemorative coin? Yes.

Can I still get one? As of 9th April 2014, yes! But only from our website, and only if you are VERY quick!

[Update 8 July 2014] The second £20 coin commemorating the Outbreak of the First World War is now available via The Royal Mint website for only £20. 

PS - why I never read the Guardian - article I found discussing the £20 coin

 

"The coin contains 0.999 silver, which is less valuable than traditional sterling silver, but avoids taxes on precious metal imports in key markets across the far east."

 

[SoulUK]

I really dislike how that whole piece is written

makes me feel like I've been conned and the RM are being smug in the corner

Not that I ever intend to use the one coin I have in shops, but its the way they are using the law (very well) to their advantage and being a bit pompous about it.

Especially as I feel it has been shown that the "everyday man" wasn't aware the legal term "legal tender", only meant it can be accepted as a court debt payment

[BaldyBob]

5 hours ago, SoulUK said:

I really dislike how that whole piece is written

makes me feel like I've been conned and the RM are being smug in the corner

Smug and dishonest. Well they couldn't admit that they have just conned people into paying £100, or £50, or £20 for an ounce of silver and a piece of nice card, could they?

When this latest incident is taken together with a recent thread on here questioning the authenticity of a recent Sovereign due to poor striking (link anyone?), and the general poor quality control from the RM over the last few years I am increasingly put off stacking my hard earned into their products.

I have some beautiful RM products such as a Quintuple and Double Sovereign....but of course they were produced in the 80's and 90's. The Royal Mint are resting on their laurels. You only have to compare the quality of the recent Lunar series to their competitors. Definitely not top flight anymore.

 

[MickB]

I've emailed my complaint to the Royal Mint and said that they should stop any further plans for these type of coins.

These were my main purchases from them but won't be carrying on buying them in the future. 

I guess I'll get the usual cut/paste email response from them that they send out.

[ApisMellifera]

It’s a shame; it also makes steer away from RM. I guess they've chosen quantity over quality.

I've also found an old blog post of Chards dealer about the low quality of RM. (I know it's an old post).
http://www.chards.co.uk/news/2013-silver-britannia-coins-highest-price-lowest-quality/

 A couple newbie questions:

I now know that these "face value" coins are classed as commemorative coins and that some of you will avoid these....

I just wondering what you think that there are no ‘1oz’ or ‘0.999’ markings on these coins? (Is that the icing on the cake?)

Would that "scare" of foreign/future stackers? Would they perhaps consider these as 'fakes' in the future??

[Guest]

I am waiting for RM to offer to back the coins by an unlimited mail refund service to any buyer primary or secondary as that is the only thing that will give confidence.

[daz]

@Numistacker that is what they should do but dont hold your breath ,  it explains why atkinsons were selling off second hand 20 and 100 coins so cheaply a while back

[MickB]

Just logged in and left a product review but I don't think they'll include it on their site.

[MCJ]

I was thinking of inviting the Royal Mint to try and defend themselves on this forum. For them to witness the feelings of their customers first hand so to speak. Anybody have an opinion on this?

[MickB]

Good idea, MCJ. I bet they would turn down the offer. At least you can send them a link so they could see for themselves what our feelings are.

[MCJ]

Sending them the contents of this thread could be an option. Just the text, no avitar names etc. ... what are people's thoughts on this option?

[Guest]

I found this online which relates to VAT on silver. This was the answer given by Inland Revenue relating to the question under the freedom of information act.

Your Request I really hope HMRC can give me transparency on why legal tender silver is charged with VAT as it seems fundamentally wrong.

How do HMRC justify charging VAT on legal tender silver coins?

Why is there no VAT on legal tender gold coins as opposed to legal tender silver coins?

Why is silver being singled out?

Why do we have to pay VAT on official legal tender silver coins from other foreign countries?

If your response is that legal tender silver coins do require VAT. Do you agree that the HM Treasury and Royal Mint should add a disclaimer detailing why VAT is added to only silver legal tender coins. Equally if this is a result of the UK government being impotent to an EU directive can you please clearly state the legislative act of the European Union restricting HMRC and UK law so I can make an appeal to an MEP.

HMRC’s Response Section 1 of the FOIA gives applicants the right of access to recorded information held by a public authority. Requests which require yes/no answers or ask for explanation or clarification are not strictly requests for recorded information and do not therefore fall to be answered under the FOIA. However, HMRC is able to provide such explanation on a discretionary basis outside of the FOIA.

Coins worth more than their face value are rarely or never bought or imported as currency, that is, to spend, deposit, exchange and so on at their face value. Their supply or importation is, therefore, not treated as that of currency and VAT is generally due. In the EU, direct taxes (e.g. Income Tax and Corporation Tax) remain the responsibility of national governments. By contrast, to facilitate the functioning of the single market in goods and services, there are European agreements governing the structure of the main indirect taxes – VAT and excise duties – although there are still some significant differences in scope and coverage (for example, the UK has a number of zero VAT rates on items such as most food and children’s clothing).

Nevertheless, national governments must exercise their taxing powers consistently with EU law for both direct and indirect tax. EU law on VAT is contained in the Principal VAT Directive (2006/112) (“PVD”), and the UK Law in the VAT Act 1994 (“VATA”). In the broadest terms VAT is charged on all goods and services supplied in the course of business (Article 2 PVD and Section 4 VATA, respectively). Both provisions then go on to list the exceptions, showing which goods and services may be supplied or goods imported exempt from VAT or at reduced rates. Under the PVD, Articles 344-356, investment gold has been relieved from VAT since January 2000. This VAT exemption was introduced because the VAT treatment of gold varied widely between Member States, leading to distortion of competition.

The UK was particularly at a disadvantage since in several Member States gold was either exempt or taxed at a very low rate. It was therefore felt desirable to introduce a single system for the VAT treatment of investment gold throughout the EU. As well as its effectiveness as a fraud prevention measure, the introduction of the exemption meant that, for VAT purposes, investment gold would be placed on the same footing as other key investment products, such as stocks and shares. A number of gold coins are included in this exemption, not because of their rarity or numismatic interest, but because of their value as gold bullion. It would be inconsistent not to include such coins within the investment gold exemption and the legislation does this by excluding from VAT coins sold for more than 180% of their gold value content. .

The EU VAT agreements on gold are specific to the circumstances outlined above and do not extend to silver. Any change to the European VAT system, including rates and exemptions, has to be agreed by all the member states. Some EU countries are permitted, by special derogation from the normal VAT rules, to apply a lower VAT rate to certain supplies of silver, but in many tax regimes, including the UK, VAT is due at the standard rate on most transactions in silver. There is an UK exception which allows VAT zero-rating for certain commodity trades involving members of specific markets, currently including gold, silver, platinum and palladium. Details on these special rules are available in our Public Notice 701/9, Commodities and terminal markets, which is available on our website at www.hmrc.gov.uk. This applies a general derogation provision under Article 394 of the Principal VAT Directive. The Government keeps all taxes under review and considers proposals for new reliefs carefully. However, the need to deal with the budget deficit means they give priority to maintaining our fiscal base, and there is no current intention to reconsider the VAT treatment of silver in the UK.

FOIA Appeals Process If you are not happy with this reply you may request a review by writing to HMRC FOI Team, Room 1C/23, 100 Parliament Street London SWIA 2BQ or email foi.review@hmrc.gsi.gov.uk. You must request a review within 2 months of the date of this letter. It would assist our review if you set out which aspects of the reply concern you and why you are dissatisfied. If you are not content with the outcome of an internal review, you may apply directly to the Information Commissioner for a decision. The Information Commissioner will not usually consider a case unless you have exhausted the internal review procedure provided by HMRC. He can be contacted at The Information Commissioner’s Office, Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF.

Yours sincerely Kevin Sleat

 

[MickB]

Their reply;

 

Hello

Thank you for your e-mail.

 

To clarify, UK coins, whether circulating or non-circulating, are authorised by Royal Proclamation in accordance with the requirements laid down by the Coinage Act 1971, which means that they have legal tender status. Legal tender allows UK coins to be accepted for payment of debts in court, but only circulating legal tender coins are designed to be spent and traded at businesses and banks.

Non-circulating legal tender – commemorative coins, such as our face-value range - are treasured for their aesthetic and collectable/rarity value and are aimed at collectors and gift buyers who appreciate the detailed hand-finished processes and expert skills used to make them, and generally commemorate significant events or people. They are not intended for daily commercial transactions, and therefore businesses and banks are not obliged to accept them.

As per our standard terms and conditions all customers are entitled to a full refund within 14 days, if they are not entirely happy with their purchase. Products must be returned to us in as-new condition in their full packaging.

 

Regards

Elizabeth Knapgate

Customer Service Advisor

 

Now since I've had the £20 coins from 2013 there's no way to get my money back on any of them.

[Guest]

She is saying what has been said by them before.

Royal Mint have a lot of explaining to do right now but they are sticking to the party line on this one and hiding behind the meaning of "legal tender"

The reason they are disingenuous bordering on fraudulent is that the 20 for 20 and like issues were sold on the minimum value EVER of the coins designated legal tender amount and they received a very different tax treatment from the Revenue with NO VAT applying to them.

Dear Royal Mint

you really cant have your cake and eat it on this one. You need to explain how you can market something to hundreds of thousands of people and clearly say this is a £50 or £100 coin and then NOT back it up in any way and hide behind an archaic meaning of legal tender. You need to explain why when you are not charging VAT on this  and therefore reinforcing the proof that these coins are considered different from other commemoratives that you do not stand firmly behind the value.

You cannot say that these coins are just "commemoratives". They may be commemoratives but that is NOT how they are sold in any way. A commemorative puts the commemorative first and the legal tender value is nominal. An £80 sale with a legal tender value of £5 so the question does not arise in the real world (particularly in relation to PM). 

These latest like for like issues are sold on the high face value of the coin and require a different treatment which has clearly not been thought out. You risk upsetting your customers world wide and diminishing your standing as one of the worlds leading mints. Please do something to change the way you backup and guarantee your like for like program by acting as a clearing house of last resort to that these coins have a minimum value. 

Consider that if you did this the confidence in the Mint and the confidence in these coins would rise to such a level resale values would rise and mean that your guarantee was never in fact needed.

I trust that you will at some stage read this public letter addressed to you and take appropriate action.

With best regards

Numistacker (a loyal long term customer of the Royal Mint)

 

 

[Scuzzle]

I'd be very hacked off if I'd bought the £100 coin, I would stretch to the £20 but I balked at the £100 coin, fair enough if you think you will be able to get £100 for it in the future by taking it to your bank but if not it's just a very expensive ounce of silver.

[DRooster]

RM are going to get an earful!

 

I just asked them where is their Northern branch so I can bring my coins in for a refund ...

 

A fast but generic e-mail respons linking to their definition.

[MickB]

I'm stuck with 1 x £100, 1 x £50 & 10 x £20 coins. Eight ounces in total at a cost of £350. I've been ripped off Royally!