Brexit and selling

[smilingsocks]

My question is with brexit possibly happening and the 20 per cent tax being levied by the European.. union...how will silver stackers sell in the future..the answer could be staring me in the face..but 4 the life of me I am having a mental block with this

[Bullionbilly]

3 minutes ago, smilingsocks said:

My question is with brexit possiblyhappening and the 20 per cent tax being levied by the European.. union...how will silver stackers sell in the future..the answer could be staring me in the face..but 4 the life of me I am having a mental block with this

If it happens at all...

[Finbinfin]

You just sell like you would anything.

I don't know what the 20% EU tax is you refer to - if you mean VAT then the rates vary by country and it's added by the seller (but only if they are VAT registered).

If you're selling within the UK, I don't see how Brexit has any impact. If you're selling to somewhere in the EU then it's still too soon to know if there will be custom duties etc to pay.

[Tingles]

I understood pre-owned Silver is VAT free as VAT has already been paid to HMRC.  Sorry, if I misunderstood what you’re selling.

[AppleZippoandMetronome]

This is a question no one can answer because no one yet knows what will happen with Brexit and what the future trading relationship with the EU will be like. There is just too much that is currently unknown - any answer would at best be a guess.

[smilingsocks]

2 hours ago, Bullionbilly said:

If it happens at all...

Yes the tax is the vat...ie no longer able to buy from the eu..without adding 20 percent to the order value

[smilingsocks]

2 hours ago, Finbinfin said:

You just sell like you would anything.

I don't know what the 20% EU tax is you refer to - if you mean VAT then the rates vary by country and it's added by the seller (but only if they are VAT registered).

If you're selling within the UK, I don't see how Brexit has any impact. If you're selling to somewhere in the EU then it's still too soon to know if there will be custom duties etc to pay.

What I was getting at..is currently an order can be placed for 20 ounces of silver from a European supplier..in future 20 percent vat will be added is what I am assuming..making silver more expensive to purchase 

[Lowlow]

I think it will be interesting to see how it goes.

Now that you'll be free(er), maybe the people of the UK will get rid of VAT for silver.

(or maybe you'll be under such a crushing debt that it'll go to 99% VAT tax ? hehe)

EDIT, oh, you said SELLING ... hmm, I don't know, would it be any different than if you sold now ?

[sixgun]

There is no issue selling - i expect no-one here is VAT registered. BYB may become VAT registered but the average member here is not. All the silver is second hand in anycase so the issue of VAT never arises. VAT has already been paid.

The people never get rid of the tax tributes to the pirates. Pirates always steal from the people, it is in their blood to do so.

People keep asking these questions about what after Brexit. We have Eire and the border - big group order to Eire (EU) - it has to be big to make it worth it and then up North. The UK will never fully leave until the EU collapses and there is no EU to leave.

[Attilio]

2 hours ago, smilingsocks said:

What I was getting at..is currently an order can be placed for 20 ounces of silver from a European supplier..in future 20 percent vat will be added is what I am assuming..making silver more expensive to purchase 

The title is misleading,you mean buying not selling.no wonder you are confusing everyone. 

[Oldun]

Since when does tax ever go down ? That is all I know. Only exception was uk gold when tax got removed 20 years ago as they couldn’t give it away.

[Pete]

In all honesty no-one knows what will happen post Brexit but as we will have left the EU with the free movement of goods ( not the same thing as tariff free which is what is being discussed ) it is more than likely we will have to pay HMRC the full 20% VAT on all imports.

The seller in Germany, Estonia or Belgium will simply send the package and invoice VAT free and us Brits will have to pay the VAT in full as you do today getting goods from the Channel Islands. In addition there will no doubt be a fixed fee for VAT processing by the shipping company. This could mean the end of buying from GS.be, CoinInvest, STG, etc. as no longer cost effective.

As for VAT on secondhand silver it is well known that a dealer can sell used silver coins at 0% VAT but chooses not to.
The dealer might show 0% VAT on an invoice but the price you pay will be the same as if 20% VAT had been added.

If we loose the differential VAT from the EU after Brexit my prediction is that our UK sellers will see an opportunity to increase their margins having less competition than they do today. The net effect is that buyers will pay more for their silver but equally so, sellers can get a higher price.

If you are buying a monster box or equivalent it might start to get interesting buying an off peak channel tunnel ticket or ferry crossing and hand carry your booty hoping the port authorities are more interested in illegals and drugs than metals but that would be smuggling I assume.

We will have to wait and see !

[Foolssilver]

Why do U.K. dealers choose to charge 20% VAT on second hand silver if they do not have to? I would assume this has little benefit from them but pushes business the way to Europe! Trying to get my head around it ....

[Pete]

5 minutes ago, Foolssilver said:

Why do U.K. dealers choose to charge 20% VAT on second hand silver if they do not have to? I would assume this has little benefit from them but pushes business the way to Europe! Trying to get my head around it ....

Greed

[dicker]

It is an extremely dangerous game to charge VAT and not turn over to HMRC.  

[Foolssilver]

Just now, Pete said:

Greed

But do they make money from it Pete? Don’t they have to pay the VAT to HMRC?

[Pete]

35 minutes ago, Foolssilver said:

But do they make money from it Pete? Don’t they have to pay the VAT to HMRC?

Example 1 -
Dealer buys new silver from the Mint.
Pays £1,000 plus VAT = £1,200
Input VAT £200

Sells to you for £1,100 plus VAT = £1,320
Output VAT £220

Pays to HMRC ( output tax less input tax ) = £220 - £200 = £20

Dealer's cash transactions show sale of £1,320 less £1,200 cost plus £20 paid to HMRC so pockets £100

Example 2 -

Dealer buys used silver from a passer by and hands over £1,000
Sells for £1,100 plus VAT = £1,320 as before
Output VAT £220

Pays to HMRC ( output tax less input tax ) = £220 - 0 = £220

Dealer's cash transactions show sale of £1,320 less £1,000 cost plus £220 paid to HMRC so pockets £100

or

Dealer sells for £1,320 and invoices at correct rate of 0%
Input and output VAT are both nil
Dealer's cash transactions are £1,320 less £1,000 cost so pockets a nice £320 !!

I have an invoice from a dealer showing 20% VAT on new coins and 0% on used coins but the price per coin is the same so this dealer was using the second part of example 2.

[Xander]

It's the same with second-hand cars, some dealers charge VAT on the profit only on the sale of the car. They call it second-hand margin scheme or they can charge VAT on the total transaction cost, that's second-hand selling price achieved. Apparently, it depends on how they choose to keep their books. Where there's a scheme there's a schemer.

[Mike]

23 hours ago, AppleZippoandMetronome said:

This is a question no one can answer because no one yet knows what will happen with Brexit and what the future trading relationship with the EU will be like. There is just too much that is currently unknown - any answer would at best be a guess.

For the avoidance of doubt, this includes our country’s esteemed leaders...

[smilingsocks]

On 08/10/2018 at 01:24, sixgun said:

There is no issue selling - i expect no-one here is VAT registered. BYB may become VAT registered but the average member here is not. All the silver is second hand in anycase so the issue of VAT never arises. VAT has already been paid.

The people never get rid of the tax tributes to the pirates. Pirates always steal from the people, it is in their blood to do so.

People keep asking these questions about what after Brexit. We have Eire and the border - big group order to Eire (EU) - it has to be big to make it worth it and then up North. The UK will never fully leave until the EU collapses and there is no EU to leave.

That's a very interesting and thought provoking scenario...like all borders and exclusions..there will be allowances 

[bluemoon]

On 08/10/2018 at 20:32, dicker said:

It is an extremely dangerous game to charge VAT and not turn over to HMRC.  

I assume if it's a private second hand deal, they're just increasing the mark-up by 20%, not actually charging VAT. So it might be £17 per ounce with 0% VAT, even though it's the same as a bullion dealer selling at £17 inc VAT.

[Lowlow]

Silver trading within the UK will probably just become a local market inside the country, much in the same way that firearms buying/selling and trading is a local market within the United States.

[dicker]

I guess the other option is to buy abroad - say Australia and have it vaulted. 

Australia is a great place - no inheritance tax for a start!

best

dicker

[RoughDog]

If the cheapest silver someone can by from a dealer after Brexit is with 20% VAT added, I would assume: -.

1. It would be pointless buying from the EU due to more expensive delivery, may as well purchase from a UK dealer, easier to deal with any returns.

2. People who purchase silver with 20% would want more for their silver when selling it second hand due it costing them more.  There would no longer be those who are able to purchase it cheaper keeping the prices down on the second hand market.

yes / no ?

 

[AppleZippoandMetronome]

23 hours ago, RoughDog said:

If the cheapest silver someone can by from a dealer after Brexit is with 20% VAT added, I would assume: -.

1. It would be pointless buying from the EU due to more expensive delivery, may as well purchase from a UK dealer, easier to deal with any returns.

2. People who purchase silver with 20% would want more for their silver when selling it second hand due it costing them more.  There would no longer be those who are able to purchase it cheaper keeping the prices down on the second hand market.

yes / no ?

 

I agree with the first point - I don't agree with the second. I think the market here will find its level. Some will be willing to pay the extra 20% and some won't. If it does come down to this I suspect interest will drop off significantly - I for example won't pay 20% more for it. I think the end result for people who buy and suddenly need to sell will be even worse then it currently is. In that position it is hard to recoup premiums paid let alone an extra 20% on top. People will try to get back that extra 20% when they sell on but I think that will make it a tough sell. Demand will fall and if they actually want to sell their items they'll have to take a loss.