VAT for Gold and Silver Bullion

In the United Kingdom, most goods are subject to Value Added Tax (VAT), which is currently charged at the standard rate of 20%. However, qualifying investment-grade gold is exempt from VAT in the UK.

Why Is Investment Gold VAT-Free?

Investment gold is exempt from VAT due to changes introduced by the European Union in 1999. At the time, several European countries applied little or no VAT to gold, creating an uneven marketplace. To establish a level playing field, the EU introduced legislation abolishing VAT on qualifying investment gold. This exemption came into effect on 1 January 2000 and was incorporated into UK law. The VAT-free status of investment gold continues to apply in the UK following Brexit.

What Qualifies as "Investment Gold"?

Under UK legislation, "investment gold" is defined by specific criteria set out by HM Revenue & Customs. To qualify for VAT exemption, gold must meet one of the following conditions:

Gold Bars or Wafers

Gold of a purity of at least 995 parts per thousand (99.5%), in the form of a bar or wafer, and of a weight accepted by the bullion markets.

Gold Coins

A gold coin minted after 1800 that has a minimum purity of 900 parts per thousand (90%), is or has been legal tender in its country of origin, and is normally sold at a price not exceeding 180% of the open market value of the gold it contains.

Specified Investment Coins

Certain gold coins are specifically listed under HMRC Notice 701/21A – Investment Gold Coins within the VAT Act 1994.

Why Is VAT Payable on Silver?

Unlike investment-grade gold, silver bullion is subject to VAT at the standard UK rate of 20%. Silver is treated in the same way as most other goods from a tax perspective. As a result, silver investment differs from gold not only in price volatility but also in its tax treatment. Silver is often considered a more speculative precious metal investment.

Are There Ways to Buy Silver Without Paying VAT?

There are certain circumstances where VAT may not be payable upfront:

• Bonded Warehouse Storage — Silver stored within a bonded warehouse can be purchased without VAT being applied at the point of sale. VAT only becomes payable if you later choose to take physical delivery.
• VAT Margin Scheme — Some dealers may offer second-hand silver under the HMRC Margin Scheme. In these cases, VAT is applied only to the dealer's margin rather than the full value of the metal.

I Thought British Bullion Coins Were VAT-Free?

Only certain British bullion coins qualify for VAT exemption. Coins produced by The Royal Mint are VAT-free only when they are made of qualifying investment gold. Silver and platinum coins, even if produced by The Royal Mint, remain subject to VAT at the standard UK rate.

VAT vs Capital Gains Tax (CGT)

It is important not to confuse Value Added Tax (VAT) with Capital Gains Tax (CGT).

• VAT is a tax applied at the point of purchase.
• CGT is a tax on the profit made when you sell or dispose of an asset, such as bullion, shares, or property.

For more information on CGT, see our Capital Gains Tax & Gold Bullion guide.

Is Silver Bullion a Good Investment?

Silver bullion is often viewed as a longer-term and more speculative investment when compared to gold. In the UK, silver is subject to VAT at the standard rate. As a result, investors must factor this initial cost into their overall return — the silver price would need to rise sufficiently to offset the VAT before a net profit is realised.

However, silver has historically demonstrated higher price volatility than gold, which can present greater upside potential during strong bull markets. Silver's dual role as both a precious and industrial metal means its price is influenced not only by investment demand, but also by global manufacturing, technology, and energy sectors.