Collecting advice from long-time collectors

[tbone]

27 minutes ago, kimchi said:

Absolutely! Would NGC remove that does anybody know?

Not NGC for just slabbing, but NCS conservation might affect it, not sure.  I have a 1937 Proof farthing that has nice  purple and blue toning, I told NCS not to conserve it to be sure (they were doing other coins in the set).

[kimchi]

29 minutes ago, tbone said:

Not NGC for just slabbing, but NCS conservation might affect it, not sure.  I have a 1937 Proof farthing that has nice  purple and blue toning, I told NCS not to conserve it to be sure (they were doing other coins in the set).

Many thanks - and sorry I did mean to say NCS!

[fehk2001]

8 hours ago, kimchi said:

Absolutely! Would NGC remove that does anybody know?

if patina has been remove the coin will look dull , ngc would not like to remove it if they can preserve the patina 

beautiful toning actually will add appearance points to the grades 

[Pete]

23 hours ago, Lowlow said:

This part of the VAT system confuses me.

@Pete says folks in the UK can buy from Germany for 7% VAT, and someone in Germany paid 7% VAT to import the coins, but I read an article about a man in the UK who was convicted for tax avoidance because he did the same two step process - establishing a business in one EU tax jurisdiction to import precious metals, then he would go from the UK to that country, take delivery of the precious metal, then transport it back to the UK to sell it, essentially having the same effect as avoiding the high UK VAT on precious metals.  I don't see what the difference is.

Why can't you, the average UK citizen, set up a business in Estonia, an EU member with no VAT on silver, import the silver, and then sell it to another business in the UK essentially importing the silver into the UK with zero VAT ?

Your EU tax structure is confusing to me in general, but this issue confuses me even more than the rest of it.

In 2011 you could buy silver coins in Germany paying 7% VAT but 19% on bars. I haven’t checked but the VAT rate increased to 19% several years ago then we saw the practice of applying differential VAT on coins so returning to a very low VAT.

If you want to trade as a business you will need to study the tomes of regulations.

Enjoy differential VAT while you can because I cannot believe it will work post Brexit

[Lowlow]

3 hours ago, Pete said:

In 2011 you could buy silver coins in Germany paying 7% VAT but 19% on bars. I haven’t checked but the VAT rate increased to 19% several years ago then we saw the practice of applying differential VAT on coins so returning to a very low VAT.

If you want to trade as a business you will need to study the tomes of regulations.

Enjoy differential VAT while you can because I cannot believe it will work post Brexit

I am curious as an outsider, I'm not subject to the VAT.

Now I'm also curious what is going to happen to the VAT post Brexit.

[Pete]

20 hours ago, Lowlow said:

I am curious as an outsider, I'm not subject to the VAT.

Now I'm also curious what is going to happen to the VAT post Brexit.

In its simplest terms VAT is a sales tax applied to just about everything sold in member states of the EU.
Some items like most food ( but not all ) are not charged VAT.
Any business trading over a certain threshold must register for VAT and charge VAT on its sales and invoices.
The business however can reclaim the VAT prepaid on good purchased - i.e. input tax.
Every reporting period a VAT registered business has to report the total of VAT charged ( output tax ) and the VAT incurred as input tax.
The business then pays the difference to the tax authorities or is refunded the difference if input tax exceeds output tax.

Under the free trade arrangement of the EU a business purchasing goods in another country can elect to have goods supplied with or without VAT charged.
If say items purchased in Germany are rated at 5% VAT but 20% in the UK, the buyer can ask to be invoiced the German VAT.
Once VAT is charged there is no additional VAT to pay.
Alternatively the buyer can ask to be invoiced without VAT but will have to pay 20% VAT when the goods arrive in the UK.

Simple example
A UK business purchases an item for £1,000 in Germany and 5% VAT added so the total cost is £1,050 and input tax is recorded at £50.
The business adds 25% margin and sells to a UK customer for £1,250 plus 20% VAT so the customer is charged £1,500 and output tax is recorded at £250
The business deducts input from output tax so pays the taxman £200.
The business has therefore invoiced £1,500  ; paid £1,050 and paid tax of £200 so making a gross profit of £250 which is it's 25% margin.

If the UK business asks the German supplier not to invoice the lower rate of VAT he pays £1,000 and a further £200 on importation.
Using he same numbers above -
Sale of £1,500  ;  paid £1,000 and paid tax of £200 so outgoing £1,200
Difference in VAT is £250 charged minus £200 input tax so pays the taxman £50 therefore gross profit £250 as above.

Where low VAT rates or differential VAT make a huge difference is to the non-business buyer like us stackers.
We cannot reclaim VAT so the price charged is what we pay and is our cost of goods.
If you can buy silver with a marginal rate of VAT of say 5% in some EU countries than you are saving the difference between our UK rate of 20% and 5%.

Once we have the left the EU, unless the free trade agreement continues in some form, then we will have to pay 20% VAT as if buying from say the USA.
No-one knows what will be agreed.

[Lowlow]

@Pete thank you for that, it is confusing to us who are outside of your VAT system to understand.  I wouldn't be surprised if it was confusing to people who lived inside of it, honestly.  That helped a lot.

[dutchman]

On 4/25/2018 at 15:02, Pete said:

In its simplest terms VAT is a sales tax applied to just about everything sold in member states of the EU.
Some items like most food ( but not all ) are not charged VAT.
Any business trading over a certain threshold must register for VAT and charge VAT on its sales and invoices.
The business however can reclaim the VAT prepaid on good purchased - i.e. input tax.
Every reporting period a VAT registered business has to report the total of VAT charged ( output tax ) and the VAT incurred as input tax.
The business then pays the difference to the tax authorities or is refunded the difference if input tax exceeds output tax.

Under the free trade arrangement of the EU a business purchasing goods in another country can elect to have goods supplied with or without VAT charged.
If say items purchased in Germany are rated at 5% VAT but 20% in the UK, the buyer can ask to be invoiced the German VAT.
Once VAT is charged there is no additional VAT to pay.
Alternatively the buyer can ask to be invoiced without VAT but will have to pay 20% VAT when the goods arrive in the UK.

Simple example
A UK business purchases an item for £1,000 in Germany and 5% VAT added so the total cost is £1,050 and input tax is recorded at £50.
The business adds 25% margin and sells to a UK customer for £1,250 plus 20% VAT so the customer is charged £1,500 and output tax is recorded at £250
The business deducts input from output tax so pays the taxman £200.
The business has therefore invoiced £1,500  ; paid £1,050 and paid tax of £200 so making a gross profit of £250 which is it's 25% margin.

If the UK business asks the German supplier not to invoice the lower rate of VAT he pays £1,000 and a further £200 on importation.
Using he same numbers above -
Sale of £1,500  ;  paid £1,000 and paid tax of £200 so outgoing £1,200
Difference in VAT is £250 charged minus £200 input tax so pays the taxman £50 therefore gross profit £250 as above.

Where low VAT rates or differential VAT make a huge difference is to the non-business buyer like us stackers.
We cannot reclaim VAT so the price charged is what we pay and is our cost of goods.
If you can buy silver with a marginal rate of VAT of say 5% in some EU countries than you are saving the difference between our UK rate of 20% and 5%.

Once we have the left the EU, unless the free trade agreement continues in some form, then we will have to pay 20% VAT as if buying from say the USA.
No-one knows what will be agreed.

 

[dutchman]

why do bullion dealers charge VAT on pre owned silver when its already been paid by the original buyer ?

[Blockhead]

On 30/04/2018 at 17:43, dutchman said:

why do bullion dealers charge VAT on pre owned silver when its already been paid by the original buyer ?

I have wondered this myself

[MancunianStacker]

Not sure that they do. It’s an easy way to increase the price by 20%. You don’t know that they pass it on to the tax man. 

[ilovesilverireallydo]

3 minutes ago, MancunianStacker said:

Not sure that they do. It’s an easy way to increase the price by 20%. You don’t know that they pass it on to the tax man. 

They have to legally. I deal with a fair few and HMRC requires them to record junk Silver purchases quite diligently. They are required to pay vat on the volume of sales. Most don’t bother with margin vat cause it requires a lot of additional recording or so I am told. 

[MancunianStacker]

Why do some dealers charge on some 2nd hand silver sales but not on other 2nd hand sales. Surely the VAT has already been paid in the past. It’s easy to say I bought £x in new silver from a mint and £x 2nd hand silver from a guy walking in the shop. Why would you have to pay full VAT on all of it?

Its a bit like a 2nd hand car dealer charging you 20% more for a 3 year old motor. 

Sounds crazy to me. 

[ilovesilverireallydo]

9 hours ago, MancunianStacker said:

Why do some dealers charge on some 2nd hand silver sales but not on other 2nd hand sales. Surely the VAT has already been paid in the past. It’s easy to say I bought £x in new silver from a mint and £x 2nd hand silver from a guy walking in the shop. Why would you have to pay full VAT on all of it?

Its a bit like a 2nd hand car dealer charging you 20% more for a 3 year old motor. 

Sounds crazy to me. 

Car dealers are actually required to pay vat on second hand cars too. It’s the same margin scheme and individual dealers decide if they want to change full vat or margin scheme vat. https://www.gov.uk/guidance/the-margin-scheme-on-second-hand-cars-and-other-vehicles-vat-notice-7181

I think the variance is because a number of dealers like to pad their profit. Remember, bullion is low margin compared to other retail, so the difference in the 20% they charge you vs the 8% they declare is additional profit. 

 

[MancunianStacker]

53 minutes ago, ilovesilverireallydo said:

Car dealers are actually required to pay vat on second hand cars too. It’s the same margin scheme and individual dealers decide if they want to change full vat or margin scheme vat. https://www.gov.uk/guidance/the-margin-scheme-on-second-hand-cars-and-other-vehicles-vat-notice-7181

I think the variance is because a number of dealers like to pad their profit. Remember, bullion is low margin compared to other retail, so the difference in the 20% they charge you vs the 8% they declare is additional profit. 

 

Learn something new every day! Cheers!!!