GoldQuestions
Silver VAT in the UK
All physical silver sold in the UK carries 20% VAT at purchase, and that VAT is not recovered automatically when a private seller later sells.
Last reviewed: 2026-06-01
The UK silver VAT rule
All physical silver sold in the UK is subject to 20% VAT at purchase. This applies to bars, coins, and rounds. Investment gold can qualify for a VAT exemption under HMRC investment gold rules, but silver has no equivalent exemption. That tax difference is one of the biggest practical distinctions between buying physical gold and physical silver in the UK.
What 20% VAT means in practice
VAT is charged on the retail transaction, including the metal value and dealer premium. It is not recovered automatically when a private seller later sells the silver. Dealer buyback quotes usually focus on metal value, product recognition, condition, and the dealer spread, not on reimbursing the VAT paid at purchase.
| Item | Amount |
|---|---|
| Spot value at GBP 25 per oz x 10oz | GBP 250.00 |
| Dealer premium at 5% | +GBP 12.50 |
| Subtotal before VAT | GBP 262.50 |
| VAT at 20% | +GBP 52.50 |
| Total paid | GBP 315.00 |
| Silver rises 25% to GBP 31.25 per oz, sell at 97% of spot | GBP 303.13 |
| Net result | GBP 11.87 loss despite a 25% spot rise |
The margin scheme
Some dealers sell second-hand silver under the VAT margin scheme. Under that scheme, VAT is applied to the dealer margin rather than the full retail price. It can reduce the visible VAT burden for the next buyer, but it does not create a VAT refund for the original private seller. A seller still receives the dealer buyback quote agreed for the product being sold.
Silver versus gold tax context
Investment gold bars can be VAT-exempt if they meet HMRC criteria. UK legal tender gold coins, such as Sovereigns and Britannias, are often discussed as CGT-exempt because gains on sterling currency are not chargeable under TCGA 1992 s.21. Physical silver has the opposite problem at entry: bars, coins, and rounds all carry 20% VAT at purchase. Silver Britannias may be discussed differently for CGT because they are UK legal tender, but they still carry silver VAT at purchase.
| Product | VAT at purchase | CGT on gains |
|---|---|---|
| Investment gold bars | 0% if HMRC investment gold criteria are met | Standard CGT context |
| Gold Sovereign or Britannia | 0% if investment gold criteria are met | Often discussed as CGT-exempt |
| Silver bars | 20% | Standard CGT context |
| Silver Britannia coins | 20% | Often discussed as CGT-exempt because they are UK legal tender |
VAT-deferred silver storage
UK buyers can also research silver stored in a bonded overseas vault. In that structure, UK VAT is generally deferred while the silver remains outside UK customs territory. VAT becomes payable if physical delivery to a UK address is requested. Storage fees, provider risk, allocation terms, audit arrangements, insurance, and exit rules all matter. VAT is deferred, not eliminated.
Key points
All physical silver bought in the UK carries 20% VAT at purchase. VAT paid at purchase is not recovered automatically on resale. Break-even can require a much larger spot-price rise than a buyer expects because VAT, premiums, and dealer spreads all sit between the purchase price and resale proceeds. Check current HMRC rules at gov.uk before relying on any tax assumption. This guide is educational only and is not tax or financial advice.
Educational disclaimer
This guide is educational only and is not financial, investment, tax, legal, or personal advice.
FAQs
Is silver VAT free in the UK?
No. Physical silver sold in the UK is subject to 20% VAT at purchase. This includes bars, coins, and rounds.
What VAT rate applies to silver bars in the UK?
The standard UK VAT rate of 20% applies to physical silver bars bought by UK retail buyers.
Can I get VAT back when I sell silver?
No. A private seller does not recover the VAT paid at purchase. Dealer buyback quotes are normally based on metal value, product type, condition, and spread.
How much does silver need to rise to break even after VAT?
It can require roughly a 28% to 32% rise from the purchase spot price, depending on the premium paid and the dealer buyback spread.
Can UK buyers hold silver without paying VAT upfront?
Some platforms allow silver to be held in bonded overseas vaults so UK VAT is deferred until physical delivery to a UK address. VAT is deferred, not eliminated, and storage fees apply.
Where should UK readers verify current silver VAT rules?
Use current HMRC guidance at gov.uk or qualified tax advice. This guide explains the common UK physical silver VAT issue, but tax rules and personal circumstances can change.