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VAT Free Silver: Everything You Need to Know

Monday, August 20, 2018

It comes as a profound source of frustration to precious metals traders everywhere that silver remains subject to VAT in most European countries. Where gold, its glitzier and more valuable precious metal cousin, has been exempt from the tax since the turn of the millennium, physical silver bars and silver coins unfortunately remain subject to a 20 per cent tax rate.

The flat rate has a far more profound effect on the wider financial market than simply silver investors having to pay a little more tax than gold investors. In fact, it vastly reduces silver’s potential as a credible trading commodity all together. Luckily, silver investors looking to invest in silver without a 20 per cent barrier have some options.

Here’s everything you need to know about VAT and silver.

VAT: gold vs. silver

In the 20th century, gold was subject to exactly the same VAT charges that other precious metals and most commodities are today.

Naturally, with VAT rates being vastly different from country to country, it means that potential investors often travelled to find the most competitive VAT rates for their products. VAT in the UK sat between 10 per cent and 17.5 per cent, with other nearby European countries charging much lower or even no VAT charges at all.

In the 1990s, the European Union wanted to develop a single unified VAT rate for investment gold, in order to curb this effect. The chances of them reaching agreement across countries for a unified VAT rate were next to impossible – so they decided instead to unilaterally abolish VAT charges on investment gold across the European Union.

This brought the commodity in line with other investment options, like stocks and bonds, which are also not subject to VAT.

Silver wasn’t and isn’t as widely traded as gold, and was much less valuable – meaning the urgency for a unified VAT rate was far less. While it’s certainly a good thing that all investment gold is VAT free – it’s particularly unfortunate that silver has never been accorded the same status.

What would a VAT free silver market look like?

In order for a silver investment to be worthwhile, it must rise in value by at least 20 per cent before investors can begin to make profits.

As it’s fairly rare for such a profound change in value to happen over a short time period, silver becomes a far more long-term investment than it would otherwise be.

If you look at a silver price chart, you’ll quickly see that it has historically been a lot more volatile than gold. Without a 20 per cent flat rate, investors would be able to treat silver as a short term, low value investment, riding the peaks and troughs of its value on a daily or perhaps hourly basis.

VAT free silver in the real world

Reading this, you’d be tempted to conclude that all is lost and that silver probably isn’t going to be the precious metal for you any time soon.

Luckily, we’ve got options.

The best way to get the maximum potential out of silver is to avoid claiming the physical product altogether. No physical product means no VAT, allowing you to claim profits from the full value by which silver rises over the period you own it.

When you buy silver with us, you can request that the final product is held in storage for the length of time you choose to own it. In a LBMA approved, ‘black box,’ your silver will be safe, protected, and most importantly – tax free.

The product remains fundamentally yours, and you can sell it at whatever time you like for the full value of the contemporary silver price. You can even ask for the product to be delivered if you decide to keep it yourself after all – but of course, VAT will then be payable on the delivered product.

There are a number of similar schemes being run by precious metal companies in the UK and the EU. You’ll notice that they tend to go a little quiet about how the VAT exemption actually works. We’re not pointing any fingers here, but some of them are definitely less legitimate than others - and a lot of them are less legitimate than ours.

VAT free silver opens up a lot of opportunities – for both the investor and the market. But it’s important to make sure we’re all legally watertight in the process. Luckily, we are – so contact us to find out more, or check out our range of VAT Free silver coins and silver bars right here.

If you’re in the mood for buying silver, why not take a look over the brand new 2018 silver Krugerrand – the very first of its kind.

2018: Is This the Year Silver Soars?

Thursday, August 9, 2018

To say silver has been behaving oddly recently is something of an understatement.

What’s in a ratio?

Watching the ratio between silver and gold is seen by many investors as a good way of predicting whether either is about to experience a sharp spike or drop in price. The logic goes that if one suddenly becomes much more expensive, relative to the other, then a correction should soon occur – creating volatile changes in price.

With silver being the historically more volatile of the two metals, it’s generally silver that jumps or falls. This is precisely why investors are now looking so carefully at this ratio.

The average price ratio between gold and silver so far for 2018 is 79:1 – higher than it’s been at any point since 1993. And since gold has barely moved in price over the last year, it’s most likely that silver is, once again, the real culprit here.

A high ratio means the price of silver, relative to gold, is much lower than it usually is. For this to ‘correct’, either the price of silver will have to rise or the price of gold will dramatically fall. So is silver about to soar?

Silver and gold: historical ratio

There’s an old saying among the precious metal community that the rightful ratio between gold and silver prices is 16:1. Whatever the price of silver is, it would follow that gold should be about 16 times the price.

In reality, that hasn’t been the case for decades. In Sterling, we haven’t seen a ratio lower than 29:1 since before 1980. In fact, the ratio generally sits between 50:1 and 70:1 – a significant amount more than the 16:1 figure that usually gets thrown around.

You can see the ratio of gold to silver between 1980 and 2018 on the chart below:

Ratio of Gold to Silver between 1980 and 2018

Source: &

As you can see, the ratio in 2018 is a lot higher than it usually is. And historically when the ratio has risen in the past, it typically falls once again shortly after.

By no means is this a guarantee. With the Brexit factor, higher geopolitical tensions than we’ve seen in decades, and a whole range of uncertainty in the contemporary financial markets – we’re certainly in uncharted territory here. But if historical data is to be trusted (and we think it is), then silver could well be about to soar.

Silver volatility

But the gold and silver ratio isn’t the only thing that’s out of the ordinary right now. Historically, silver has always been the more volatile of the two precious metals. To avoid delving into complicated facts and figures, the supply and demand of silver tends to be more variable than gold, since it’s used more for non-investment purposes.

The curious thing about silver currently, is that its volatility rates have been much lower over the past few years than has been historically the case.

The following chart maps the average annual volatility of silver since 1968. This is the amount by which the average price changes year on year – not the raw price itself, which you can see over on our silver price charts.

Average Annual volatility of Silver since 1968


Average volatility over the last full annual trading period (2017) sat at its lowest point since 2000. So, not only is silver much cheaper compared to gold than it normally is, but its raw price is also moving much less.

What comes next?

There’s every chance that these figures simply mark a long term change in the relationship between gold and silver and the volatility of precious metals. The rules of financial markets are certainly less fixed now than they were before 2008.

But the fact that silver is behaving out of the ordinary by both metrics is raising eyebrows across precious metal markets. It might not explode tomorrow, but there’s every chance that these abnormalities will correct over the next few weeks or months. And if it does, you’ll certainly want to have some precious silver deposits to cash in on.

VAT free silver

Gold bars, bullion and coins are subject to a blanket VAT exemption. Unfortunately, silver is not.

This has been a source of frustration for precious metal investors for some time, as it means the price of silver must rise by at least 20 per cent before any investor can hope to make any returns.

Silver’s historic volatility would otherwise lend itself to a healthy short-term trading market, as investors seek to capitalise on the short-term peaks and troughs in its price. In current trading conditions, this is impossible.

The Gold Bullion Company has recently offered a way around this. Silver which is bought, but not delivered, remains held in a secure, protected LBMA vault, for which VAT remains exempt unless the buyer chooses to have the physical product delivered.

If the silver owner keeps the physical product in the vault for the entire length of ownership, then no VAT will be payable – meaning you can begin to make returns from the entire proportion by which silver appreciates in price.

If a large silver spike is indeed imminent, then this could allow investors to maximise potential returns.

Contact the Gold Bullion Company to find out more.

Check out our full range of silver bars and silver coins if you, like us, think the time is ripe for a silver investment.

New Silver Bullion Krugerrand Launches!

Friday, July 27, 2018

In 1967, the South African government first issued the gold coin that would go on to become the most traded gold coin in the world: the South African Krugerrand. It was the first of its type anywhere in the world; minted from one troy ounce of fine gold.

To celebrate the 50th annual release of the world-famous gold Krugerrand, the Rand Refinery have expanded their repertoire and introduced the very first silver bullion Krugerrand, minted from one troy ounce of fine silver. Here’s everything you need to know about the updates.

A brief history of the South African Krugerrand

Though other coins like the American Gold Eagle, the Canadian Maple Leaf and the British Britannia have followed in its footsteps, none have quite reached the popularity of the original South African Gold Krugerrand at any point over its 50 year life cycle.

First launched in 1967, the South African government sought to encourage the use of private gold ownership. As one of the world’s largest single manufacturers of gold, it comes as little surprise that South Africa led the trend of one ounce fine gold coin collecting, or even that its version went on to remain the most popular.

The name for the coin was taken from the name of the country’s fifth president, Paul Kruger, together with the name of South Africa’s currency: the Rand.

After an initial flurry of interest in the Krugerrand, it suffered some setbacks in the 70s and 80s as Western Democracies banned imported goods from South Africa in protest of their controversial apartheid policies. Despite this, it remained the world’s most widely traded gold coin.

The 2018 silver Krugerrand

Despite minting the most popular gold coin in the world, the Rand Refinery has until now not followed in the footsteps of The Royal Mint, The United States Mint and The Royal Canadian Mint in issuing a silver variant of its flagship gold coin.

Like the original gold version, the new silver coin features one troy ounce of fine silver. The design is also identical to the gold coin, featuring the image of Paul Kruger on one side and an antelope on the other.

The inscribed images are accompanied by the word ‘Krugerrand’, and ‘fine silver’ on one side, with the latter being written in both English and Afrikaans, the main two languages of South Africa. The words ‘South Africa’ are inscribed on the other side, also in both languages.

The interesting thing about the silver variant is that it will carry an actual face value denomination of 1 rand, unlike the original gold version.

Historical value

As the first silver Krugerrand of its kind, this coin is likely to earn pride of place in plenty of coin collections around the world. That means, as well as being valuable for the worth of its precious metal content, it’ll likely come to have a historical and commemorative value in a few years’ time.

The Rand Refinery plan to issue just 500,000 of these coins. These aren’t a ‘limited edition’ run, and there’s every chance the refinery will choose to continue minting the new silver Krugerrand from 2019. There are however, a limited number of 2018 coins (which will likely become more valuable than later potential variants) – so make sure you get yours soon.

Whether you’re an investor looking to simply harness the potential value of investment silver, or an avid coin collector, there are plenty of tangible benefits to owning this and other silver coins.

Buy your 2018 silver Krugerrands here

The silver Krugerrand is set to be released in the next few weeks, and there’s certainly a lot of buzz happening around the market as it awaits their delivery.

If you’re looking to get your hands on one of these coins before they all run out – then you’ve certainly come to the right place, because it’s currently available to pre-order on our website.

The market price changes depending on the live price of silver – but once you’ve pre-ordered your version, we’ll lock in the price at the time of buying. That means if the price changes between now and delivery date, you’ll still only pay the originally quoted price.

Have a look over our entire range of Krugerrands right here, or check out other silver coins in our collection.


This blog represents one person’s opinion only. Customers should conduct their own research and take advice before making an investment. We do not offer investment advice.