Hi, first time poster , I am hoping to set up an online silver store in the uk. I know that if your business producing an annual rolling turnover of over 79,000 you have to pay vat. So my question is, if my annual rolling turnover is less then 79,000 would I be able to sell silver vat free, as I have not seen anyone do this in the uk:/? Although I hope the business to grow past 79,000 annual rolling turnover eventually, it would be great to start by being able to sell vat free silver to begin with. Thanks, JRGSilverBullion
Welcome to silverstackers JRGSilverBullion, nice to meet another UK stacker, isn't that many of us from the UK. I thought that the VAT is on all sales of investment silver regardless of turnover, however I may be wrong. If you were selling silver without VAT in the UK, I would presume that you would have so many orders that the 79K rolling limit, if it applies, would be hit pretty fast. I also think that 79k of sales would bring you hardly any profit, bullion dealers operate on small profit margins of a few %. If you made 2% profit on 79k sales you would have only 1580 profit for the year. So you should work it out to see if its profitable if you were selling over 79k and charging VAT, your buying power in relation to other dealers might be considerably less, and you also have business expenses such as storage and insurance etc Let me know if you start something, if I had a large amount of spare capital I would definitely try setting up a bullion store, more as an enjoyable hobby than a business as the profit margins are so small, though if you manage to get high enough sales volume you could do well from it. You could also look at setting up offshore, in Guernsey or the Channel islands, then you can sell silver VAT free, and your clients would just pay VAT when the silver is imported into their country. That way you can sell worldwide, whereas if selling from the UK charging VAT you could only sell to UK/EU investors and collectors as your prices would be too high for clients from other countries.
I think the 79k is the limit where you have to register for VAT. This means you don't have to charge vat, but you have to pay it on anything you buy. If you register, you can claim the vat back on your purchases, but then you have to charge it out based on your higher marked up price. If unregistered, you pay vat at purchase and charge it. That's my understanding anyway. But hell, as a UK resident myself, if you can sell VAT free silver then I'll be a good customer. You will need to undercut the likes of europesilverbullion though, which may be a tough task. I can get silver delivered from them for 17.50 an ounce at the moment.
@danny-boy What do you normally buy at 17.50 an oz when you import from Europe? Do you get 1oz coins?
Yes Chris, usually maples. Don't get me wrong, I'm not a massive buyer, I'm mostly a collector to be honest. When nothing tickles my fancy on the collecting front, I buy the cheapest coins I can (must be circular, and legal tender). Just checked, I can get 20x 2014 Noah's Arks (1oz) for 16.75 each delivered to my door. I have quite a few Noah's now. Dan
I can buy at just under 16 per oz coin. So if I charged around 18 per oz coins excluding vat ( and about 21.60 including vat) I would be making about a gross profit of 11%. Haven't looked deeply into shipping costs yet but I think I could get insured delivery to anywhere to the uk within 5 days for around 2.00. So in total it would be around 23.60 per oz coin. So you may be better of at europesilverbullion Danny-boy, innless you buy smaller orders as I saw that the postage was around 19.90 euros postage for a small order at europesilverbullion. But tell me what you think though
Yea I buy from the EU sometimes, there is no import taxes or charges to import into the UK because its coming from the EU.
Yes, shipping is high but the rounds are cheap. Even buying 5 coins with shipping is 18.80 per oz. I can buy maples and other low premium coins on eBay for 20-21 delivered from the UK. I'm not out to ruin your fun. I looked at buying a monster box from Estonia (worked out at 15 an ounce, and flipping them on eBay just to get a few ounces myself for free, but with fees and shipping there was practically no meat on the bone for me. Then there's the packing stuff, time etc. Go for it if you find a way, I'd have a few off you. Dan
This VAT thing is very simple. If you are a business operating below the requirement for VAT registration you have the cost of goods purchased and the sale price of goods sold. The difference is your profit and no VAT reporting. However you cannot get a refund on VAT charged by your suppliers. Assume you buy a coin for 15 plus VAT your cost is 18. If you sell it for 23 your profit is 5. If you register for VAT then you can claim back the VAT charged to you but you have to charge your customers VAT and pay the taxman as follows - Purchase a coin for 15 plus VAT at 3 = 18 to pay but 3 is input tax Sell a coin for 23 but this time you will issue an invoice for 19.17 plus 20% VAT of 3.83 = 23 Your output tax is 3.83 You now have a difference of 0.83 which you pay the taxman Your profit is therefore 19.17 - 15.00 = 4.17 or ( 23 - 18 ) - 0.83 = 4.17 So non VAT registered you make 5 VAT registered you make 4.17 The benefit of vat registration is that you can now claim all other expenses connected to your business so equipment, stationery, phone, IT etc. with vat on the invoices can all be reclaimed so in essence you can expect a nice cheque from the government in the early days but they will start watching you as they don't like paying out just sucking in. My suggestion is to seek out a bullion dealer in the USA as there is no tax charged. Some dealers are operating on a very low margin - remember that word MARGIN because Estonia doesn't charge VAT but it has a higher margin. Get your VAT registration and you will be able to claim a full refund on the VAT charged. Work out the optimum order size to amortise shipping costs - they can be significant if not well researched. Voila - new shop opens up but work out your NET LANDED COSTS very precisely then compare to what Atkinsons charges and see if you can beat them bearing in mind the hassle of invoicing, packing & shipping single coins as well as banking costs etc because as a business you WILL get charges from your bank. That's just a start without mentioning business insurance, how it may affect your home insurance, council tax and the rest of it. Best of luck and if you get started I very much look forward to hearing more.
What a fantastic explanation. Atkinsons are about the cheapest UK vendor I have found, and free shipping. Plus they are only about 10 miles from me so I can collect. They do offer a great service, if you can beat their prices then you would be onto a winner.
NOT QUITE !! Free shipping is a misnomer .. read "shipping inclusive" Atkinsons is a good benchmark for prices and to compare I always assume a minimum order of about 20 ounces. That gives a better comparison to BullionbyPost and CoinInvestDirect. Note that if you order enough from CoinInvestDirect they ship UPS door to door for free. Always check our UK suppliers for the VAT inclusive price as headline prices are grossly misleading. In addition prices "FROM" are for mega - orders and can catch you off guard if not paying attention.
Well it is free shipping because they don't charge for it. It's obvious that it's built into the price. I did ask if they would do a "collection" price, but sadly not. Their mix & match is a winner if you want a few different coins, but their headline page does not show if an item is in stock which is a pain.
If importing from the US, they won't charge you VAT when you purchase, but for don't forget you have to pay the VAT + customs charges when it hits UK shores.
It's because there is no VAT on Secondhand Silver, not particularly scrap... Hence I would imagine, that when buying the VAT is added, but it's not added when you try to sell back to dealer as it is then secondhand. Then, if it's in good condition who knows if its secondhand or new, and the dealer resells it with VAT added yet again. ie from Coin Invest Direct today New 1oz Philharmonic inc vat - 17.21 Secondhand Buy back price - 13.24 Or a dealer may actually say it's secondhand but amazingly the premium above spot is give or take the vat inclusive price
The dealer who operates their business correctly charges 20% VAT on new silver and 0% VAT on secondhand silver. Great I hear you say BUT the price to you and me is exactly the same so the dealer is definitely winning on used silver everytime.
Also note a VAT registered dealer will have to pay VAT on the profit they make even if the items/silver are second hand. Be aware if you are selling a lot of silver/PM there may also be capital gains tax to be payed by you as an individual however UK silver Britannia coins are exempt from CGT which makes them my preference to stack in the UK along with gold sovereigns which are totally tax free in the UK both to purchase as well as to sell. This does however make it all the more important to record the purchase price of any taxable stock you may have as a dealer and even as an individual in some cases. A lot also depends on who you sell your silver/PM to but even the scrap metal dealers and jewelers in the uk don't like to deal in cash these days preferring to credit your bank account which leaves a paper trail, there are also certain value thresholds that compel a business buyer/seller to report transactions over a certain value in the uk even if it is tax free. I have found as yet, the best (spot) prices available for any PM's I have are from reputable businesses that will comply with all UK legislation especially when it comes to bulk purchases and also sales. Does anyone know if Platinum Britannias are exempt from CGT in the UK?
You only need to start buying Britannias for their tax CGT benefit if your stack is large enough to hit the CGT limit. You can make 10600 profit per year without having to pay any CGT. (Though I think the 10600 is the total amount per year that applies to all investments, so you could sell a property and already hit that allowance) Also, if they didn't sell Britannias with this tax advantage then know one would buy them. They are such ugly coins
