VAT Free Silver

Author: Ian Davis - Bullion Manager

Published: 31 Aug 2018

Last Updated: 12 Oct 2020


Welcome to our blog on VAT-free silver. If you’re simply looking to buy VAT free silver please follow this link.  Alternatively read on to find out more about VAT free silver.

VAT-Free Silver

What is Value Added Tax (VAT)?

According to the European Union, VAT is a general, broadly based consumption tax assessed on the value added to goods and services.

This consumption tax is currently regulated by Brussels (until the UK formally withdraws from the EU) and is set to at least 15%, with the UK taking liberty to increase this to 20%. You can work out how much tax you are paying by dividing the sales amount by a value of 6. This means for every £100 you spend you are paying £16.66 in tax, which actually is quite a lot. 

Some products such as milk, books, children’s clothes and take away food carry no tax and are classified as zero rated - yes that’s right you should be entitled to a discounted price if you takeaway your food from a restaurant rather than sitting in! Newspapers are zero rated (note their digital counterparts are taxable), maps are zero rated and energy supplies are usually 5%. As you can imagine there are many rules for other products and if you're inclined to do so you can read more on HMRC's website. 

More relevant here is that gold has been exempt from VAT since January 1st 2000 but silver, platinum and palladium have remained subject to the full amount, which is currently 20%. This makes gold a much better investment if your funds allow but that's not to say silver (at the right time) doesn't make a good investment. If you believe the price of silver to be low you can offset the VAT amount when selling at the higher price.

The benefits of VAT are said to be increased revenue for the state (whether you agree with this or not) and that these amounts are to be distributed via benevolent means. The second most likely benefit is that higher VAT rates should stimulate a savings response amongst the population. A few issues with this is that given the current economic environment shouldn't we be spending and not saving? Why have we not reduced VAT when we reduce interest rates? We are left to conclude that VAT is a means to rob more pennies off the spending public rather than its use as a influencer of spending behaviours. Secondly it is difficult to say whether money is spent correctly to benefit society at large with people having differing views on spending on topics ranging from education, military or even propping up banks (amongst a thousand others)......... A final point is that VAT itself could be a means to simply tax (and penalise further) those who have made a hard earned profit (even after already paying income tax) and that for these people who are likely to spend more they are subject to more VAT at the end of the day. This last point can often be overlooked when talking about high earners not paying enough tax, assuming they have made it from non-tax evading means and spend their money within the UK.

Why Store Silver (or Gold) Outside of the UK?

The benefits of precious metal storage outside of the UK is that it completely circumvents the local economic and political conditions. In times of uncertainty it is thought of as a "safe" option to store your metal holdings outside of UK borders. 

Security At Our Vault

We store our VAT free silver with vaults on Guernsey. Your agreement will be with Network Securities Limited and all your goods will be insured with Lloyds of London. 

CGT Exempt And No VAT

We have a number of products that are capital gains tax exempt including all coins classified as British legal tender. We have a complete take on capital gains tax on our blog here. You can also find all of our CGT exempt products on this link here. 

Do You Wish to Collect Your Stored Silver?

We can offer VAT free silver if you store it in Guernsey. As soon as you want to take delivery you will be subject to pay VAT in the form of customs duty as you cross the border that is should you declare it or get inspected. You could drive it over the border without declaring anything but this is not recommended as its illegal! 

We do offer very cheap silver coins for immediate delivery to the UK - these can be found on our dedicated cheapest silver coin page

Buying VAT Free Silver Coins From Europe

We are aware of many people who take advantage of VAT "free" silver from mainland European dealers. Our understanding is that silver is only truly VAT free in Estonia and any attempts to import it into the UK from elsewhere would incur some VAT charge along the way. This would either in the country the sale is made or at customs. In fact, many countries have varying levels of VAT applied to silver and these are issued to the best of our knowledge (please correct us if we are not 100% accurate as we like to keep our pages up to date): 

  • Austria 20%
  • Belgium 21%
  • Denmark 25%
  • France 20%
  • Germany 7%
  • Italy 24%
  • Ireland 23%
  • Luxembourg 17%
  • Netherlands 21%
  • Spain 21%
  • United Kingdom 20%
  • Estonia 0%


HMRC state the following in their guidance (



Given the above it appears that VAT free silver shouldn't be a thing unless you're a VAT registered entity, right? So how are people buying silver VAT free from overseas or at least with very little VAT applied? There are several ways we can think of doing this.


Buy silver from an non-EU country where there is no VAT applied.

Stash it wherever you can in your pockets, suitcase or elsewhere where customs staff reluctantly will go to look in the hope that you can smuggle it back into the UK. Not the legal or preferred option for many! 


Buy VAT free silver in a country that is part of the European Union:

This could be the likes of Estonia where VAT on silver is 0%. The rules are that no customs duties are to be paid when buying goods coming from within the European Union, so you could freely transport this over the border. It is therefore absolutely legal to bring heaps of silver in VAT free believe it or not! Sitting back to think about this further we conclude that the EU are not doing a great job at harmonising a single market! Any UK dealer is put on the backfoot immediately as HMRC force a 20% VAT amount on any new silver coin. We can offer a reduced 5% rate on the special second hand silver scheme where customers need only pay the VAT on the profit margin which is often a very good deal just remember to set stock alerts for out of stock products). So not only are we at a business disadvantage but customers are also being charged above odds in the UK due to a tax levied by the government. We highly recommend to our customers to buy second hand silver when the time is right as this is the best way to secure a silver deal in the UK. Secondly if your comfortable leaving your silver in storage why not try our VAT free silver products. If your funds do stretch gold is often a better investment full stop as it is exempt from VAT. We have a constant flow of of deals on our special offers page that you may find fits your budget.


Buy "VAT free" or "marginal VAT" silver online

The differential tax margin scheme is somewhat of a loophole after a deliberate short or half arsed intervention by Brussels in 2014. In Germany silver used to incur 7% VAT up until 2014 and to harmonise the common market Brussels intervened asking Germany to raise VAT to 19% - where it has been ever since. HMRC has since done the UK silver investor no favours by maintaining a 20% VAT rate on silver. However, the policy updates failed to include goods bought outside the EU and only applied to products of domestic origin. Therefore, new silver coins bought from a non-EU country (e.g. Australia, Canada or America) are still subject to the 7% VAT and then to a margin tax on the profit made. This margin tax is charged at 19% but as the profits made on silver coins are relatively low the margin tax is very small.  According to HMRC if the product is brand new an invoice would need to be supplied to show the amount of VAT paid and as of now we don't know if this is available on an invoice purchased from these companies.

Our conclusion 

The EU and HMRC are failing to maintain a fair and harmonised market for silver bullion dealers in the EU putting UK dealers at a significant disadvantage. Customers who buy new silver products from UK dealers are being subject to a 20% VAT rate whilst they can legally buy from Estonia, Germany and Belgium for much lower VAT rates. We can compete with Estonia by offering VAT free silver for storage in Guernsey and can even offer lower VAT rates than Germany and Belgium on our second hand silver through the UK second hand scheme. Remember to set a stock alert if we currently do not have any stock and this way you will be the first notified when stocks are added. We currently sell what we believe to be the cheapest new silver coin within the UK and if you find a 1 ounce new silver coin cheaper do let us know!

So, what do we do with the information we have acquired, well we will be making a formal approach to HMRC to make our case known as UK businesses should not be at a disadvantage At the end of the day if we were to open a foreign branch of Chards the UK will lose tax revenues as VAT will be collected in Germany or wherever else. We do hope there will be a change of policy in the UK as otherwise our hand will be forced into registering a foreign branch of Chards. If HMRC do acknowledge that a change is required in essence accepting an error will they (or the EU) reimburse our customers the VAT?!?!?.......unlikely!!!

Further Reading

You may wish to view all of our articles on our silver guide

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