if hmrc has made a mistake or vat is charged at 20% incorrectly then any ruling should be retrospective and fee's paid should be reclaimable or am i just dreaming?
Brilliant thread, nice one silvertrader..huge kudos to you for the massive effort and inroads you made with the HMRC
The exemption is from the normal VAT rate, exemption = 5%, normal VAT = 20% Excluded from the exemption thus means normal VAT rate. So that Ian appears to me as clearly stating here that maples/ASE's etc are 20% VAT. In the second email, he actually doesn't deny this either: Notice how he clearly mentions trading value as a function of condition and manufacturing year (thus low mintage year) and other unspecified things, but of course all such numismatic interest fields). Is this applicable to a monsterbox of thus 500 identical silver eagles of let's say 2011-2013? I would answer here a clear 'no'. It's clearly mainly intended as storage of wealth during times of inflation. So generalizing both classes into the one with the lowest tax rate, appears to me more as wishful thinking than legal reality. Nevertheless, there are plenty coin cases which may be hard to classify, making it hard to define them in legal texts that aren't open for more interpretations, especially by people that are unfamiliar with legal texts terminology and wording. But that is true in many aspects / fields of law, and is why lawyers etc exist, that then make your claim at the risk of another, and sometimes fat, cost. I would conclude from this that on bullion-property dominating coins, there is 20%, and on numismatic-property dominating coins, 5%, and that sellers that just blindly label their parcels with the lowest tax rated code, may face extra VAT bills, and penalties. Thinking twice may be recommended before trying it. Nevertheless, if some sellers here do try it, and post their experiences here, we'll know. To give a lower tax rate definition example from another EU country, here are the requirements to be classified as a 'collectible' car: 1. being relatively scarce 2. normally not used for the original purpose 3. being the subject of special transactions outside the normal trading in similar consumer goods 4. having a higher value 5. have to be in their original state, without major changes to chassis, steering, brake system, engine, etc 6. at least 30 years old 7. being a model or type that is no longer in production I don't think it's hard to translate these 'classic car' requirements to coin requirements, and thus to correctly code the parcels. So attempting to explain your wrong code with 'hard to understand law text', may not suffice.
Some people might use a box of ASEs for that purpose, but what if you're buying them to open the tubes up and search for "perfect" MS70 examples? Plenty of people do that and plenty of people search through their change to look for coins that are worth more in the collectible market than in the every-day market too. Nobody is suggesting spare change should be subject to VAT. And what if inflation is low at the time you purchase them? Inflation in the UK is at about 2.3% at the moment. Clearly you're not purchasing the coins to escape a measly 2.3% inflation rate. ASEs are scarce compared to other American coinage. MS70 coins are even scarcer. Since the original purpose is protecting wealth, searching for high grade coins would put them outside of that. If they happen to protect wealth as well, then that would be a happy coincidence, just like people who buy a collectible car and discover they can drive down to the local shops in it. Would going to the trouble of importing coins from another country be "special" enough? There are plenty of other things that are "special" about buying ASEs or other silver coins anyway - if you asked for ASEs and were given $1 Federal Reserve Notes instead, you'd complain and sent them back for a refund. Applicable on a face value basis, on a similarity basis (compared to, say, a generic 1oz round), and on a like-for-like basis where a perfect MS70 coin is worth more than a crappy one that's been handled, dropped, dented and toned. No issues there. The whole point is to find them in the best condition possible. Could easily be argued that age isn't necessarily relevant to value as a collectible (for coins or cars - there are plenty of newer cars with very small productions runs that sell for premiums on the secondary market). They ain't making ASEs with 2012 written on them any more. Of course this brings up the question of what happens to coins that are not perfect MS70 specimens, but I guess you'd never really know unless you sent them all off for grading. Some people might not have the time to get around to doing that for...years...
Based on those law texts, those pickpecked "perfect MS70 examples" might, maybe after being graded as a method of 'making it sure', be subjected to the numismatic/collectables lower tax rate. The others of the monsterbox not. It doesn't have to be harder than this. And in case some deliberately try to make it harder, causing lengthy law texts with exemptions, as to evade the normal tax rate, one day government may conclude to abandon the lower tax regime on collectibles/art at all. Then the discussion ends the same time. Those that really were in the numismatic/collectibles field, will then 'suffer' the normal tax rate. I'm not sure if they'd appreciate the result of this lower tax rate 'effort'. WHAT IF the government in its law texts just takes the absence of the collectibles class recognition parameters? They could just mention 'inflation' as 1 example. Some here buy these silver coins to make profit. That's even more than inflation hedging, since a hedge is categorized as undoing potential losses. Every kind of coin is scarce compared to all the other coins in the world. Get what I'm doing here? I reference a much bigger 'class'. From ASE to general US coinage and then general world coinage. 1986 5,096,000 1987 9,420,000 1988 5,869,000 1989 6,166,000 1990 7,247,000 1991 6,952,000 1992 5,544,000 1993 5,890,000 1994 5,540,500 1995 4,590,000 1996 3,466,000 1997 3,636,000 1998 4,320,000 1999 9,008,500 2000 9,133,000 2001 8,827,500 2002 10,475,500 2003 9,153,500 2004 9,617,000 2005 8,405,000 2006 10,021,000 2007 9,887,000 2008 19,583,500 2009 28,766,500 2010 34,662,500 2011 39,868,500 2012 33,742,500 2013 23,396,500 Total: 338,284,500 Do you think government will accept a total mintage of 338 million, as a reason to declare ASE's from any year, as relatively scarce? Then take an individual year. Let's pick the lowest ASE year 3,466,000 in 1996. Scarce enough to declare an ASE from year 1996 as scarce? Now imagine a YES on that last question. How many parcels will benefit the lower tax regime? How many ASE 1996 are sold & shipped, relative to the amount other years, especially recent years? I would say, very little. What will it then matter, and to how many people? Who here will be affected, and in which degree (percent of sales)? In the oldtimer car example, the original purpose of the car could for ex be just driving 'round (thus a regular car back in the time). According to the law text, if you bought such oldtimer now, and drive around with it, thus the same, it would mean no collectibles tax regime. So you'd need to park it somewhere, as to make clear that you, guess what, yes correct, 'collect' them haha. This makes clear that the writer of the law text does all he's able to, to eliminate bogus usage of the 'collectibles' property, for the obvious reason. Imagine the collectibles tax regime had instead been higher than the normal. Suddenly noone would be numismatic anymore haha. So how far you think they go with your 'happy coincidence' explanation? I mostly bought my coins from other countries because they were cheaper there. It's obvious that those in UK that buy a monsterbox ASE's from let's say Germany, do it for the lower than UK normal tax there in Germany. Now where do you see "special", in terms of numismatics? I read this law text simply as: car being sold at garage Joe at a standard price, but for ex at a public sale by bidding. It's abit funny how you changed 'special transactions' to 'transactions with another country'. See, that is what I ment with 'interpreting law text freely / wishful thinking'. Hint: government may not follow you there. And here you do this once again. The law text was about cars in general, as to distinguish collectibles/oldtimers from cars in general. Does the presence of a face value (eventually including property legal tender), indicate numismatic/collectible? Not for the UK government. Aside of this, I start to wonder, you are picking here out every numbered property of that list for cars I gave, to question it on an individual level. Well, that list requires ALL properties to be positively matched. It's a logical AND list, not a series OR. One requirement not met suffices for declaration as non collectible. Here you do again that 'free interpretation'. 'Original state' isn't the same as 'best condition'. You make that from it. Original state here means no major changes, ex chasis, steering, etc. How do I know? It's in the law text. I just read what is there. You change stuff. You can argue with the law executioners as much you want, they can just say that they follow the law, and raise the 20% normal tax rate. You can then question the law makers, since they decided that 30 years old requirement, and ignored your 'very small production runs that sell for premiums...'. And frankly, I can understand them in the standalone case 'very small production run'. How many mints out there produce dozens/hundreds 'limited mintage' coins every year? Every X days I receive an offer from a local (private) Mint here, with the Nth rare coin designed for blabla this and blabla that. Will the higher premium alone suffice to meet this particular requirement in the list? Maybe. Will it meet all the other requirements? See, and as said above, that is also needed. Correct. Hura ASE 2012 is collectible so lower tax regime? No. Fails other requirements in the list (in the collectible cars analogy list). Maybe the government won't care, and just consider them as normal rate taxed items. For various reasons, see the law text. Maybe government just treats the hard to find out items as for the normal tax rate. In the end, the reduced tax rate is an exemption from the normal tax rate. If finding out if it matches all exemption requirements, is a hard job, maybe they just see that as not their problem?
Sorry, I should have said that I was playing Devil's Advocate But my point in doing that was to illustrate that you can make arguments in favor of ASEs being eligible for a lower rate rate as collectibles and yes, that does mean taking the laws as they are written and interpreting them in the broadest possible way. There is an entire profession dedicated to doing just that. Given that the UK already has a zero tax rate on gold specifically because of it's status as a store of wealth i.e. to protect the holder against inflation, the entire premise that silver coins should be taxed at the normal VAT rate if people are trying to use them for that purpose is shaky to begin with. From that perspective, it isn't a case of "how can I get out of paying tax?" it's "why is this even being taxed in the first place?"
You're right in that ASE as collectible. But my post was to make clear that the problem is that this topic is clearly experienced by many as a general no full but reduced tax also on general silver bullion coins (numismatic or not) imported in UK. And this topics author also doesn't really help in making that clear, see these quotes: That last is not true, that 'legal monetary value' can only reference the face value, and that is according to the law text not sufficient, see Ians sentence: The topics author also clearly makes a reference to todays common bullion price (so not your numismatic old ASE or so), see: So I'm not sure if playing the Devil's Advocate was a good idea here. It already confused enough, here and on that linked forum, let alone someone advocating the same by a discussion that actually turnt out to be a play. Personally, I don't agree with tax as such. I consider it theft. And in the case of import taxes, it's destroying competition external market <> local market, in other words, it makes the market smaller and thus lowers welfare level. So I'm not defending the governments (import) tax on silver here. Even in the light of existing taxes on consumption, those that buy silver as storage of value / money, don't consume it like industrials for ex. Yet we have to pay consumption tax alike we did. The coins we sell are the very same as those we bought. We didn't do anything with them other than just storing. Tax on silver and not on gold is clearly intramarket discrimination in favor of gold. If this topics authors story would cut any, import or regular, on silver coins, I greatly applaud it. But it's just not reality. As an additional informative story I'd give this: http://www.silvertv.tv/ It's a Dutch effort that brought the different tax treatment silver versus gold to court.
Hey guys, Well that's a lot of swings and roundabouts between pirocca and big A D so I'm not sure where to start! It was all pretty confusing before you guys started second guessing, but a hell of a lot of good points But at the basis of all this is! it can be interpreted as you want it or need it to be ! Luckily this gentleman is the one who makes the decisions on the classifications and not us so were just have to wait and see how it pans out As for someone who has done this and imported coins at the 5% vat rat you need only go to my link and see the scans of the refund that i have already received i just got my second one to Also notice how my claims were raised to the top of the refund list and already done even though ukba is still struggling with the backlog back to 27 February I think this speaks volumes! Also in cutting and pasting various sections out of the email responses which are open to interpretation wont really get us anywhere as i think it will come down to how they want to interpret it regardless of legalese or arguments. this bit of the email was not mentioned: (Coins such the Britannia Silver Coin, Canadian Silver Maple Leaf and US Silver Eagle Coin recently imported by you are collectors' pieces and as such VAT at import would be 5% Apologies if this information was unclear in my earlier email ) So i think that clears it up! there are other various considerations going into this which i have not mentioned because it is not my place! such as it was legal to import these coins from Guernsey vat free up until November last year but then the classification code was changed and everyone started getting slammed 20% vat Also The costs involved in dealing with the amount of complaints and refund requests due to the 20% vat rate rate is apparently more trouble then its worth in regards to the amount of vat that they are collecting. add in the staffing cuts and you begin to see why they might be recalculating the situation. Anyway guys its not up to use at the end of the day its how they want to play it so as soon as i know more i'll pass it on
ps: @ grinners Your welcome mate i have a tendency to speak my mind @ dune mate if its from the last few months and you personally had to pay the vat yourself then send in a bor286 mate, at the cost of a stamp its well worth a try Sincerely Martin
Hey pirocco, the link that you mentioned (As an additional informative story I'd give this: http://www.silvertv.tv/ It's a Dutch effort that brought the different tax treatment silver versus gold to court.) all i get is a grace jones music video ?
I disagree because by playing Devil's Advocate it can make people look at situations in ways they wouldn't normally see them. As silvertrader.eu has discovered, simply questioning the authorities on the matter has made them check and re-evaluate their own procedures and he seems to have convinced them to treat VAT on silver coin imports the way he thinks they should be: with the lower VAT rate. I don't think failing to question government authorities is a good approach at all. All too often the way government handles things is simply the result of a civil servant somewhere interpreting the law as they understand it. Their understanding may be wrong, or at least not the best interpretation of a particular law when it is considered together with other laws. Because lawmakers cannot predict every possible scenario that will be affected by the laws they create, people must have a right to challenge civil servants' interpretation and implementation of the laws. For example, in this case it seems somebody in Customs (wrongly) created a procedure where every package is charged the full 20% VAT rate. Complaining about it appears to have made Customs aware that they need to actually read the tax code number on the package's import documentation before calculating how much VAT should be charged. In acknowledging this they also create a recourse for people to claim back extra VAT that was charged in error, so not only can problems possibly be avoided in future but they can also be fixed later if they do occur.
The title of this thread says it all... "Importation Vat on numismatic coins into the UK is not 20%" However the most important part of the response from HMRC is this (which has already been mentioned above)... "Certain types of coin are often used as a store of wealth during times of inflation and the supply of coins for this purpose -which again typically takes place above face-value would exclude the transaction from the exemption." Buying a monster box, or even a few rolls of ASEs, Maples or Britannias, is not a purchase of numismatic coinage, as they are bullion coins. As such they are not covered by the exemption and attract 20% VAT. If silvertrader.eu has got a refund on importing bullion coins he should count himself lucky. But HMRC are nothing if not effective at going into the details if it reduces the tax take. They will nail this down and bullion coins will continue to have VAT of 20% slapped on them. 5% will only be applied on rare coins or proofs. Make the most of the Estonian discount while it lasts. The European Commission is back on a VAT harmonisation hunt and is looking at ways to force EU member states to scrap reduced-rate VAT rates such as the UK's 5% on energy, books, children's clothing etc.
A couple of points - Earlier mention was made of tax free imports from the Channel Isles. Was this not VAT free for declarations lower than 18 in value ? With silver coins considerably higher than this last year there was no possibiity of getting Maples and ASEs into the UK VAT free. UK sellers of cosmetics, DVDs etc were compalining about the unfair competition so this threshold for VAT free imports was reduced. Some Guernsey coin sellers started to offer smaller denomination rounds and even copper but per ounce prices were too high for us stackers to be of interest. In Germany, VAT on silver bullion is full rate but reduced rate on coins ( and coin bars ) is 7% as other threads cover in depth. However silver coins will be full rate VAT from next January so buying in Germany will no longer be attractive to us Brits. Does anyone honestly believe that the UK will lower its VAT to 5% from 20% whilst Germany raises its from 7% to 19% ?? Not happening my friends and if it did, somehow I think the EU bureaucrats will reverse it. Tariff coding for "numismatics" is clearly defined and if a coin is rare, or significantly higher priced than normal then 5% it is BUT standard issue bullion will not be classified as numismatic despite what a civil servant has written - he is likely to be insufficiently informed or knowledgeable on this specific topic and until a "ruling" is declared, 20% it remains. If however, by good fortune through written challenges and appeals, standard bullion has had VAT refunded on a couple of instances then this is not setting a precedent - just smile and be lucky but be ready for a disappointment in future. "One swallow does not a summer make" said someone ! Sorry to be negative but I cannot see the UK government lowering VAT on bullion silver coins unless we leave the EU.
Photonaware's previous post sums up the situation perfectly. If you think you're going to get charged 5% VAT on silver in the UK.....think again. It seems some people have been fortunate here and there, but it's only a 'blip' based upon an inaccurate understanding of what is bullion and what is numismatic by some spotty kid in an office. At the end of the day your run of the mill Maples, Eagles, Philharmonics and the like are bog standard bullion. 20% all the way. It's that simple. I wish it were otherwise, but it isn't.
That 'Ian' references the coins you imported. That is a for your coins specific statement, not a general one. According to the law text that that 'Ian' references, and also what he says, coins that are bought with as main intention hedging against inflation, are exempted from the lower tax regime. So tell me, specific for the case where you got that bor??? refund for, which specific coins (kind/year) did you import ?
Jesus does no one read my posts before posting themselves !! Ian is the technical manager he is the one you eventually end up with when no one else knows what to do. he makes the final decisions on the classifications of items and he is the one who sends out directives to the UK border force telling them what to charge !! hardly a ( some spotty kid in an office. ) maple leafs 2013, American eagles 2013, Britannia 2013... refund for them was given because they were wrongly classified and i was overcharged!! they came in tubes of 20 / 25 so run of the mill coins!! Seriously guys chill for a bit while this all runs its course lol there is no point in second guessing what ifs
silvertrader - seriously, don't you think that 'the powers that be' will come down on this quicker than a chicken vindaloo passes through a donkey? If you're getting away with it at the moment then good on you, well done. But it isn't going to last.
