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Pete

What if We Have a No Deal Brexit ?

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There is a fair chance that in under 8 weeks we will leave the EU without having reached an agreement.
How will that affect fellow stackers buying silver from Estonia, Belgium & Germany who currently use the low VAT differential rate ?
Currently we are able to buy silver coins from several EU dealers at much reduced prices because they are not charging full VAT and goods move freely across the EU so no further VAT is payable.
HOWEVER - this can suddenly change and goods coming from the EU will be treated the same as if they were coming from say the USA so full VAT at 20% WILL be charged.

Here is an extract from a government paper with some bits highlighted -

 

VAT on goods entering the UK as parcels sent by overseas businesses

If the UK leaves the EU without an agreement, VAT will be payable on goods entering the UK as parcels sent by overseas businesses.

The government set out in the Customs Bill White Paper (published October 2017) that Low Value Consignment Relief (LVCR) will not be extended to goods entering the UK from the EU. This note confirms that if the UK leaves the EU without an agreement then LVCR will no longer apply to any parcels arriving in the UK, this aligns the UK with the global direction of travel on LVCR. This means that all goods entering the UK as parcels sent by overseas businesses will be liable for VAT (unless they are already relieved from VAT under domestic rules, for example zero-rated children’s clothing).

For parcels valued up to and including £135, a technology-based solution will allow VAT to be collected from the overseas business selling the goods into the UK. Overseas businesses will charge VAT at the point of purchase and will be expected to register with an HM Revenue & Customs (HMRC) digital service and account for VAT due.

The digital service is an online registration, accounting, and payments service for overseas businesses. On registration, businesses will be provided with a Unique Identifier which will accompany the parcels they send in to the UK. They will then declare the VAT due on those parcels and pay this via their online account. This ensures the process of paying VAT on parcels does not become burdensome for UK consumers and businesses. To give overseas businesses sufficient time to familiarise themselves with their new obligations, the online service will be available for businesses to register in early 2019, prior to 29 March.

On goods worth more than £135 sent as parcels VAT will continue to be collected from UK recipients in line with current procedures for parcels from non-EU countries, guidance on these procedures can be found here in HMRC notice 143. VAT will also continue to be collected in line with current procedures for all excise goods sent as parcels and potentially in cases where their supplier is not compliant with HMRC’s new parcels policy. HMRC is working with the relevant industry stakeholders and will provide further information in due course.

With this in mind who is "prepping" or stock-piling just in case ??

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25 minutes ago, Pete said:

For parcels valued up to and including £135

Kilo kooks, lunars and koalas have a face value of 30 dollars each. 4kg = AU$120. No worries, there's even room for a couple of small ones!

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9 minutes ago, Big23 said:

The UK should team up with the USA and show the other EU members how it could work. So we might get rid of the EU in it's current form...

Ordering from US dealers without/with low import duties would open new possibilities :)

You could change MAGA to, MABGA.😋

Edited by Xander

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USA Group Orders, bring it on  :)

In fact maybe someone would like to do a comparison on a Royal Mint Tube of x25 - 1oz Silver Britannia's on a group order at todays rate from the EU, compared with the same coins paying the @Pete 20% or the @sixgun 5% VAT landed in the UK as a Group Order comparison from the US?

Edited by Kritika

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The issue with importing coins from the USA is the customs VAT and that dealers often charge high shipping costs.

If the UK were to decide to zero rate silver or the 5% VAT on ' Collectors' pieces of numismatic interest ' were pressed home, silver collectors' pieces of numismatic interest could be imported from anywhere. Silver could for example be imported from GS.be with no VAT on the coins and then the 5% VAT would be applied by customs. GS.be silver coins have VAT in the price, so they should be sold as new coins with no VAT. The price coming out of GS.be would be lower than it is at the present time. UK dealers would also become much more competitive in these circumstances.

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11 hours ago, SouthCoastInvestor said:

Here is an idea: why don't we as a group start a campaign to lobby the government to remove VAT on silver bullion, to bring it into line with gold bullion ?  We could all write to our MPs.

 

You would need to start a petition. 10,000 you get a response from government. 100,000 it has to be debated in parliament.

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12 hours ago, SouthCoastInvestor said:

Here is an idea: why don't we as a group start a campaign to lobby the government to remove VAT on silver bullion, to bring it into line with gold bullion ?  We could all write to our MPs.

 

As if MPs gave a sh.. about what a bunch of silver investor on some interweb forum want. Unless you have the backing of 2/3 of the tabloid press, it won't stand any chance.

 

9 hours ago, Big23 said:

The UK should team up with the USA and show the other EU members how it could work. So we might get rid of the EU in it's current form...

Ordering from US dealers without/with low import duties would open new possibilities :)

Yes, the UK could beg to become the official 51st state. But would the Yanks accept such a burden?

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Looks as if some folks haven't really understood VAT and may also be getting confused with import duties.

Duty and VAT are totally separate.

When we talk about tariffs, WTO etc., this is duty and for our PM coins & bars this is ZERO meaning there is no duty charged on imports from the EU or the rest of the world.
VAT is however charged as a sales tax and is 20% for silver and platinum but 0% for gold.
There is a special 5% numismatics VAT code for some silver coins but 99% of the time would need to be reclaimed as HMRC will automatically charge 20%.

Today when you order from the EU the dealer has already invoiced the VAT in his / her country and as we are members of the EU, goods travel freely across borders without having to charge additional VAT. Whether GS.be or others include 2%, 5%, 19% or whatever number, this is rated as VAT paid so you have no further liability.
When you buy today from the USA, the dealer has not charged any VAT, or sales tax, so when the shipment hits the UK you will be charged the full 20%.

If we leave the EU without a deal we will not be able to avoid paying the full VAT because the EU dealer will be instructed to charge UK VAT on all goods shipping to the UK.
On larger value shipments, the dealers will be asked to ship the goods VAT free but they will be stopped, as if originating say from the USA, and you will be required to pay the VAT at 20% ( or 5% if you can argue or prove your exception to the full rate ) to HMRC and not the seller.

Should you decide to drive through the chunnel ( remember the booze cruise ? ) and collect a boot load of silver, avoiding paying the UK VAT because GS.be or STG can invoice you as a local customer at their low rate or differential rate, you will need to declare the goods returning to the UK and be subjected to the 20% VAT or be prosecuted for smuggling.

I hear the cogs grinding away - ahh - if we placed a group buy and had the silver shipped to the Irish Republic, because they are still in the EU, the lower prices from GS.be et al remain as they are today.
Without any hard border these goods could without hindrance or checks ( or the need to drive across the channel ) be transported to the North, which is part of the UK, and then freely distributed to all forum members.
HOWEVER this would be illegal and is the subject matter of the back-stop which is causing so much difficulties in the Brexit negotiations.

 

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At the moment I am not planning anything different. I buy my PM's slowly through the year using money that hasn't been set aside for anything else. I have no intention of raiding other savings to panic buy cheaper silver before Brexit. It would be unfortunate for sure if we were no longer able to purchase viably from Europe. I suspect my own purchasing would slow down as the current ways of buying cheap silver in the UK would likely be swamped by other people who have more time to pursue them than I do. Essentially I won't be buying any more silver if it suddenly costs 20% more than it currently does.

There are certainly ways people could smuggle it in to the country but what costs would this add to the pm's not to mention the risk. If a group order was done and someone agreed to drive down to pick the pm's up and smuggle them back what happens if this person gets caught and at the very least gets a bill for 20% on £30k+ worth of silver or at worse the silver gets seized? You'd be better off coughing up the 20% from a UK dealer than going this route.

For me it would be over in the UK. As I am Canadian and travel back there to visit friends and family once or twice a year I would probably find a solution to buy more there and store it there until I eventually move back. That isn't without its own risks or costs so I'm not sure how viable it is but it is an option open to me so I would at least look in to it.

Edited by AppleZippoandMetronome

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I can see me simply buying more fractional gold is all. As other have observed, Silver with 20% VAT added is unattractive to me.
Now, if they bring it in line with gold (and honlestly, why are they charging VAT on what is classed as money??? I can understand on bars and rounds and hand poured shapes, but on coins with a denomination??? meh!)

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11 hours ago, Coolsmp said:

You would need to start a petition. 10,000 you get a response from government. 100,000 it has to be debated in parliament.

I tried that about 18 months ago and got about 5 responses! I put the link on the forum but was met with a lot of "uh why bother trying". 

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I wasn't thinking about the online petition route, rather getting people to talk to their local MPs about the issue.  I don't think removing VAT on silver coins would require legislation - it could be done in the budget by the Chancellor.

Sometimes MPs will take up issues on behalf of constituents and raise a question in Parliament. It would be a good sensible policy to encourage investment / saving in silver bullion and to remove the "anomaly" whereby gold is not taxed but silver is.

 

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