Silver As An Investment
First the Bad News
Investment gold is exempt from VAT, for further information about investment gold please see our "What is Investment Gold" page.
Silver is currently still subject to VAT and many people as us why this is case. Almost everything in the UK and EU is subject to VAT, although there are many exceptions. Perhaps because investment gold is now exempt, people think that all other metals such as silver, platinum, and palladium should also be exempt. Sadly this is not the case.
Because of this, we do not normally recommend silver as an investment, preferring gold, but in exceptional circumstances (when the gold:silver ratio is high), we would consider silver to be a better investment bet than gold. Another option to gain exposure to silver is to buy second hand silver as this carries lower amounts of VAT. See our explainer here on special scheme silver.
Some Good News
Second-hand Silver Coins
We also get a small number of second-hand silver coins, both collectors' coins and bullion coins, although we get far more demand for them than we can supply. This also applies to silver bars, but even more so. Most second-hand goods can be resold under a special scheme whereby the only VAT payable is on the dealers margin, and therefore almost negligible.
Investment Silver Coin Bags
We can now supply modest quantities of investment silver coin bags.
These are made up of old silver coins, usually UK coins from the 1920 to 1946 period. These were composed of an alloy containing 50% pure silver. We can supply them in sealed 10 kilo bags. Each bag contains a minimum 10 kilos gross weight of silver coins, and therefore contains 5 kilos of pure silver. Most of these coins will be very worn, and have no collectors value. Because these are dealt with under the "secondhand" scheme, there is only a small amount of VAT to pay on them. We can offer these investment bags at prices very close to the value of the intrinsic silver content.
Purchasing Silver - Info and Advice
Many of our gold coin investors are also convinced that silver is too cheap. Certainly it has in 1974 been as high as about $47 to $50 per ounce, and if were ever to regain those price levels, there would be substantial profits to be made. Whether silver will hit such high prices again, we do not know.
Silver A Low Priced Alternative?
Silver is a popular choice for investors looking to buy low priced precious metal. Silver is considered more speculative than gold and price swings tend to be on the wild side.
Silver Price Can Be Volatile
The volatility of the silver price creates the potential for substantial returns on investment in the future. However, the buying / selling spread of silver coins and bars is wider than most gold bullion and investment silver is subject to VAT which is not applied to investment gold. Silver is best seen as a long term investment, one that you can keep adding to and hold onto for years to come
You may wish to view all of our articles on our silver guide