---
title: "VAT on Gold, Silver, and Platinum: What You Need to Know"
source: "https://goldealers.co.uk/knowledge/tax-vat/vat-on-gold-silver-platinum"
date: "2025-12-02"
---

# VAT on Gold, Silver, and Platinum: What You Need to Know

Value Added Tax (VAT) significantly affects the economics of buying and selling precious metals in the UK. Understanding which metals attract VAT and how it applies can help you make more informed investment decisions. This guide explains UK VAT rules for gold, silver, platinum, and palladium, with particular focus on what it means when you're selling to dealers like Goldealers.

## VAT Basics

VAT is a sales tax added to most goods and services in the UK:

**Standard Rate**: 20% (as of 2024/25)

**How It Works**: 
- Added to the sale price of goods
- Collected by sellers on behalf of HMRC
- Paid by the end consumer

**Who Charges VAT**: VAT-registered businesses (typically those with turnover over £85,000)

> As a private individual selling your precious metals, you don't charge VAT. VAT is something you may have paid when purchasing metals, and it affects dealer pricing when they resell.

## Investment Gold: VAT-Exempt

One of the major advantages of gold investment is its VAT exemption:

### What Qualifies as Investment Gold?

**HMRC Definition**: Gold bullion and coins meeting specific criteria:

**Gold Bars**:
- Purity: 995 fineness (99.5%) or higher
- Form: Bars, ingots, or wafers
- Weight: Accepted by good delivery standards
- Produced by LBMA-approved refiners

**Gold Coins**:
- Purity: 900 fineness (90%) or higher
- Minted after 1800
- Legal tender in country of origin
- Traded at no more than 80% premium over gold content value

### Examples of VAT-Exempt Gold

**Bars**:
- 1g to 1kg bars from recognized refiners
- 999.9 fineness (24 carat)
- Hallmarked by LBMA refineries

**Coins**:
- Gold Britannias (24 carat)
- Gold Sovereigns (22 carat)
- Krugerrands
- American Gold Eagles
- Canadian Gold Maple Leafs

> When buying gold from dealers, the absence of VAT makes investment gold significantly more affordable than silver or platinum of equivalent value. This is a key reason gold is popular for investment.

### What This Means for Sellers

**When You Sell Gold to Goldealers**:
- You don't charge VAT (you're not a business)
- We don't add VAT to the price we pay you
- No VAT paperwork required

**Original Purchase**:
- If you bought gold originally, you likely paid no VAT
- This means your total cost was just the gold price plus dealer premium

**Example**:
- You buy a 100g gold bar for £5,000 (no VAT)
- You sell it later to Goldealers for £6,000
- No VAT at either end
- Your profit: £1,000 (subject to [Capital Gains Tax](/knowledge/tax-vat/capital-gains-tax) rules)

## Silver: VAT is Charged

Unlike gold, silver attracts standard VAT:

### When VAT Applies to Silver

**On Purchase**:
- Buying silver bars or coins in the UK attracts 20% VAT
- Added to the dealer's sell price
- Significantly increases initial cost

**Example Purchase**:
- Silver bar metal value: £500
- Dealer premium: £50
- Subtotal: £550
- VAT (20%): £110
- **Total you pay: £660**

### Silver VAT Exemptions (Rare)

Very limited exemptions exist:

**Investment Silver** (rarely applies):
- Must meet strict HMRC criteria
- Minimum fineness 999 (99.9%)
- Recognized refiner
- Listed on certain exchanges
- Most consumer silver doesn't qualify

**Historical Silver Coins**:
- Pre-1947 UK silver coins *may* be exempt under certain conditions
- Complex rules, often not VAT-free in practice

**In Practice**: Assume all silver purchases include VAT

### What This Means for Sellers

**When You Sell Silver to Goldealers**:
- You don't charge VAT
- We pay you for the silver metal content
- **You won't recover the VAT you originally paid**

**The VAT Problem**:

This creates a significant loss when selling silver:

**Example**:
- You bought silver bar for £600 (£500 silver + £100 VAT)
- Silver price stays flat
- You sell to Goldealers for £475 (95% of £500 metal value)
- **Loss: £125** (£100 VAT + £25 dealer margin)

Even if silver price hasn't changed, you're immediately down due to VAT and margins.

> Silver investors must factor in the 20% VAT cost. Silver needs to appreciate significantly just to break even when selling. This makes silver less attractive than gold for short-term investment.

## Platinum: VAT is Charged

Platinum faces the same VAT treatment as silver:

### VAT on Platinum

**On Purchase**:
- 20% VAT added when buying platinum
- Applies to bars and most coins
- No UK legal tender platinum coins exist (yet)

**Example**:
- Platinum ring (investment): £1,000 metal value
- VAT: £200
- **Total: £1,200**

### When Selling Platinum

**To Dealers like Goldealers**:
- No VAT charged by you
- We pay based on platinum content
- VAT you paid is not recovered

**Example**:
- Original purchase: £1,200 (inc. £200 VAT)
- Platinum price up 10%: now worth £1,100 metal value
- Sell for £1,075 (98% of spot)
- **Loss vs purchase: £125** despite price increase

## Palladium: VAT is Charged

Same rules as silver and platinum:

- 20% VAT on purchase
- Not recovered when selling
- Adds to investment cost

## VAT and Scrap vs Bullion

### Scrap Gold Jewellery

**Personal Jewellery**:
- Often second-hand when you sell
- Original purchase may or may not have included VAT
- When selling to Goldealers: no VAT involved

**Why**: You're selling personal possessions, not operating a business

### Margin Scheme (Dealer Side)

When dealers like Goldealers buy second-hand precious metals:

**VAT Margin Scheme**:
- We may use a special VAT scheme for second-hand goods
- VAT only paid on our profit margin
- Not on the full resale value
- Helps us offer better prices

**Your Concern**: None – this is dealer accounting, doesn't affect what you receive

## International Considerations

### Buying from Abroad

**VAT on Imports**:
- If you import silver/platinum from outside UK, you may owe import VAT
- Gold investment products can be VAT-free if proper procedures followed
- Complex rules, seek advice if importing

### Selling Abroad

**Private Sales**:
- If selling to individuals in other countries, VAT rules vary
- Generally not your concern as private seller
- Buyer might face import duties/VAT

## Why This Matters for Investment Strategy

### Gold's Advantage

**VAT-Free Status Makes Gold**:
- More cost-effective to buy (no 20% markup)
- Easier to sell at profit (no VAT to recoup)
- Better for medium to short-term holdings
- Preferred by investors who value liquidity

**Example Comparison**:
- £10,000 buys £10,000 worth of gold
- £10,000 buys only £8,333 worth of silver (rest is VAT)

### Silver's Challenge

**VAT Burden Means**:
- Need substantial price appreciation to break even
- Better suited to long-term holds
- Still attractive for some due to lower unit cost and industrial demand
- Collectible silver coins may retain value differently

**Break-Even Calculation**:
- Silver needs to rise ~26% just to cover VAT + typical margins
- (£100 silver + £20 VAT + £6 margin = £126; needs to reach ~£126 to break even)

### Investment-Grade Platinum/Palladium

**Similar to Silver**:
- VAT adds 20% to cost
- Need price appreciation to offset
- Consider longer-term outlook if buying

## Practical Advice for Sellers

### If You Bought With VAT

**Accept the Loss**:
- VAT you paid is sunk cost
- Can't be recovered when selling
- Focus on current metal value

**Example Mindset**:
- Don't think "I paid £600, want £600 back"
- Think "This silver is worth £500 today, what can I get?"

### When Selling to Goldealers

**What to Expect**:
- Price based purely on metal content and current spot price
- No VAT deducted from what we pay you (we pay gross)
- No VAT added to what we pay you
- Clean transaction: metal value only

### Records

**Keep VAT Receipts**:
- May be relevant for insurance claims
- Proves legitimate purchase
- Shows original cost (useful for [CGT calculations](/knowledge/tax-vat/capital-gains-tax) on gold)

## Common Questions

**Q: Can I reclaim VAT I paid on silver when I sell it?**

A: No. As a private individual, you cannot reclaim VAT. Only VAT-registered businesses can reclaim VAT on business purchases, and personal silver doesn't qualify.

**Q: Why is gold VAT-free but silver isn't?**

A: EU directive (which UK adopted) exempted investment gold to encourage gold markets. Silver, platinum, and palladium were not included in the exemption.

**Q: If I'm VAT-registered for a business, can I buy silver VAT-free?**

A: Only if the silver is genuinely for business use (e.g., silversmith using it for products). Investment silver for personal holding doesn't qualify.

**Q: Does Goldealers charge me VAT when I sell my gold?**

A: No. When you sell to us, there's no VAT involved. We pay you for the metal content. VAT only comes into play when dealers sell to new buyers.

**Q: What if I inherited silver – do I still "lose" the VAT?**

A: If you inherited silver, you didn't pay VAT yourself, so there's no VAT loss from your perspective. However, the metal's value reflects the market's VAT situation when others buy it.

## Summary Table

| Metal | VAT on Purchase | VAT on Sale (to dealer) | Recovered When Selling |
|-------|----------------|------------------------|----------------------|
| **Investment Gold** | ❌ None (0%) | ❌ None | N/A |
| **Silver** | ✓ 20% VAT | ❌ None | ❌ No |
| **Platinum** | ✓ 20% VAT | ❌ None | ❌ No |
| **Palladium** | ✓ 20% VAT | ❌ None | ❌ No |
| **Gold Jewellery (scrap)** | Varies* | ❌ None | N/A |

*Jewellery from shops may include VAT; second-hand may not

## Final Thoughts

VAT is one of the key reasons gold dominates precious metals investment in the UK:

**For Gold Investors**: Enjoy tax-efficient buying and selling

**For Silver/Platinum Investors**: Understand the VAT hurdle and plan accordingly (longer holding periods help offset the initial cost)

**For All Sellers**: When selling to Goldealers, VAT isn't a concern in the transaction itself – we pay based on metal content at current market rates

At Goldealers, we handle all VAT obligations on our side when we resell metals. Your sale to us is straightforward: metal weight, purity, and spot price determine your payout, with no VAT complications for you as the seller.

> If you're starting to invest in precious metals, consider gold's VAT advantage. Even though silver is cheaper per gram, the VAT cost means gold is often more cost-effective overall.

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**Questions about VAT on your precious metals?** While Goldealers can't provide tax advice, we're happy to explain how VAT affects our buying and selling processes. [Contact us](/contact) for more information.

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*Published by Goldealers Ltd · https://goldealers.co.uk/knowledge/tax-vat/vat-on-gold-silver-platinum*