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Investment-grade gold is exempt from VAT in the UK. Silver, platinum, and palladium are not — they attract 20% VAT on all physical purchases delivered in the UK. The distinction comes from HMRC’s Gold Scheme, a specific exemption derived from EU tax law that covers gold but no other precious metals.
This matters directly to UK investors because a 20% VAT charge on entry means any non-gold metal must appreciate at least 20% before you break even — before CGT is even considered.
At a glance
| Metal / product | VAT on UK physical purchase | VAT on ETC / financial instrument | Notes |
|---|---|---|---|
| Gold (investment grade) | 0% | 0% | HMRC Gold Scheme exemption |
| Silver (coins, bars) | 20% | 0% | Bonded vault route avoids VAT |
| Platinum (coins, bars) | 20% | 0% | No exemption |
| Palladium (coins, bars) | 20% | 0% | No exemption |
| Non-investment gold (jewellery, < 995 fine) | 20% | N/A | Standard-rated |
| Gold ETCs (iShares IGLN, WisdomTree PHAU etc.) | 0% | 0% | Financial instrument |
| Silver ETCs | 0% | 0% | Financial instrument |
Gold: the VAT exemption explained
Investment gold is zero-rated for VAT under HMRC’s Gold Scheme (Value Added Tax Act 1994, Schedule 9, Group 15). The exemption applies to two categories:
Gold bars and wafers: Must be at least 995 fine (99.5% purity) and meet one of the following: LBMA Good Delivery standard, or produced by a refiner on HMRC’s approved list.
Gold coins: Must appear on HMRC’s list of qualifying investment gold coins — published and updated annually. The list includes coins that are, or were, legal tender in their country of origin, with purity above 900 fine. Current qualifying coins include:
| Coin | Country | Purity |
|---|---|---|
| Gold Sovereign | UK | 916.7 (22ct) |
| Gold Britannia | UK | 999.9 |
| Krugerrand | South Africa | 916.7 |
| Canadian Maple Leaf | Canada | 999.9 |
| American Gold Eagle | USA | 916.7 |
| Austrian Philharmonic | Austria | 999.9 |
| Australian Kangaroo | Australia | 999.9 |
This is a partial list. HMRC’s full list includes approximately 50 qualifying gold coins.
What is not covered:
- Gold jewellery — VAT applies at 20% regardless of purity
- Gold below 995 fine that isn’t a qualifying coin
- Collector items and proof coins may qualify if they are qualifying investment coins; check the HMRC list
Silver: 20% VAT and the bonded vault route
All physical silver sold and delivered in the UK attracts 20% VAT. There is no exemption equivalent to the Gold Scheme for silver.
On a 1oz silver coin at approximately £27:
- Metal cost: £27
- VAT: £5.40
- Total cost: £32.40
That VAT is not recoverable when you sell — dealers buy silver back at the market price without adding VAT to their payment. You start 20% below breakeven before the silver price moves at all.
The bonded vault route
The only practical route to VAT-free silver for UK investors is bonded vault storage. When silver is purchased and held in a customs-supervised vault outside the UK VAT zone — typically Zurich, Singapore, or Toronto — it has not entered UK commerce and no VAT is due.
VAT only triggers at the point of UK physical delivery. Silver sold back through the platform without UK delivery never crystallises a VAT liability.
The main platform is BullionVault, which operates allocated silver storage in Zurich and Singapore. Annual storage fee: approximately 0.48% of metal value. There is no minimum size, though storage costs make positions below £1,000 expensive to run.
For a detailed breakdown of the cost comparison between physical silver (VAT paid) and bonded vault silver, see how to buy silver VAT-free using bonded vault storage.
Important limitation: Bonded vault silver solves the VAT problem but not the CGT problem. Silver Britannias held physically in the UK are CGT-exempt (UK legal tender) but attract 20% VAT. Silver in a bonded vault avoids VAT but is subject to CGT on any gain. There is no route that is both VAT-free and CGT-free for silver in standard market conditions.
| Silver route | VAT | CGT |
|---|---|---|
| Silver Britannia (UK delivery) | 20% | Exempt |
| Silver Maple Leaf (UK delivery) | 20% | Taxable |
| Silver in bonded vault (BullionVault Zurich) | 0% | Taxable |
| Silver ETC (inside ISA) | 0% | Exempt |
For most UK investors, the Silver Britannia (CGT-exempt, VAT-paid) is the practical choice for smaller holdings; the bonded vault route is better for larger positions where the VAT saving is significant.
Platinum and palladium: 20% VAT, no exemption
Physical platinum and palladium both attract 20% VAT on purchase in the UK. Unlike gold, neither metal has an HMRC-recognised investment exemption.
The VAT impact is the same as for silver: on a 1oz platinum bar at approximately £850, VAT adds £170, bringing the total cost to approximately £1,020. Platinum must appreciate at least 20% before you break even on the VAT cost alone.
The practical alternative for both metals is the ETC route — no VAT on purchase, ISA-eligible, lower ongoing costs than physical storage. See should UK investors buy platinum? and how to invest in palladium in the UK for full comparisons.
ETCs and financial instruments: no VAT
Gold, silver, platinum, and palladium ETCs are financial instruments traded on stock exchanges. They are not physical metal and are not subject to VAT. This applies regardless of whether the ETC is physically backed by allocated metal in a vault.
Main UK-listed options:
| Metal | ETC | Ticker | Annual charge |
|---|---|---|---|
| Gold | iShares Physical Gold | IGLN | 0.12% |
| Gold | WisdomTree Physical Gold | PHAU | 0.39% |
| Silver | iShares Physical Silver | ISLN | 0.20% |
| Platinum | WisdomTree Physical Platinum | PHPT | 0.49% |
| Palladium | WisdomTree Physical Palladium | PHPD | 0.49% |
ETCs held inside a Stocks and Shares ISA are also CGT-free. This makes them the most tax-efficient structure for silver, platinum, and palladium — both VAT and CGT are eliminated within an ISA.
ETCs held outside an ISA are subject to capital gains tax on gains above the £3,000 annual exempt amount at 18% or 24%.
How the VAT position shapes buying decisions
For most UK investors, the VAT difference is one of the clearest dividing lines in precious metals investing.
Gold physical (coins and bars): VAT-free entry, and CGT-free exit for Sovereigns and Britannias. The combination makes gold the most tax-efficient precious metal to buy and hold physically in the UK.
Silver physical: 20% VAT on entry creates a meaningful performance hurdle. CGT-exempt Silver Britannias soften this on the exit side, but the entry cost remains. Compare Silver Britannia vs Maple Leaf for which coin makes most sense.
Platinum and palladium physical: Both attract 20% VAT with no CGT-free coins. The ETC route dominates for most investors.
ETCs (all metals): No VAT. ISA-eligible for CGT shelter. The right choice when physical ownership is not the goal.
Compare current prices across UK gold dealers using the best-deal tool.
Tax and regulation
The Gold Scheme (VATA 1994, Schedule 9, Group 15): HMRC’s exemption for investment gold. The legislation exempts supplies of investment gold — qualifying bars and coins — from UK VAT. Sellers of investment gold who would otherwise be exempt may opt to tax their supplies, allowing them to recover input VAT on related costs; buyers from an opted seller can recover the VAT if they are VAT-registered.
Post-Brexit continuity: The UK Gold Scheme was derived from EU Directive 98/80/EC. Post-Brexit, the UK retained the exemption. There has been no indication from HMRC of any intention to change the investment gold VAT treatment.
Dealer obligations: UK bullion dealers registered for VAT account for zero-rated supplies of investment gold on their VAT returns. Buyers do not need to be VAT-registered to benefit from the exemption.
Non-qualifying gold: Jewellery, coins below 900 fine, and items not on HMRC’s qualifying list are standard-rated at 20%.
This guide contains factual information only and does not constitute financial or tax advice.
Frequently asked questions
Is gold VAT-free in the UK? Investment-grade gold is exempt from VAT in the UK under HMRC’s Gold Scheme (VATA 1994, Schedule 9, Group 15). This covers gold bars of 995 fine (99.5%) or above, and coins on HMRC’s approved list — including Sovereigns, Britannias, Krugerrands, Maple Leafs, and around 50 other qualifying coins.
Do you pay VAT on silver coins? Yes. All physical silver purchased and delivered in the UK attracts 20% VAT — regardless of whether it is a Silver Britannia, Maple Leaf, or any other coin. Unlike gold, silver has no VAT exemption in the UK. The exception is silver stored in a bonded vault outside the UK VAT zone, where no VAT is due while the metal remains undelivered.
Why is gold VAT-free but silver is not? The UK VAT exemption for investment gold is derived from EU law (Directive 98/80/EC), which the UK retained post-Brexit. The directive specifically exempted investment gold. Silver, platinum, and palladium were not included in that exemption and remain standard-rated at 20%.
How can I buy silver without paying VAT? By purchasing silver stored in a bonded vault outside the UK VAT zone — typically Zurich, Singapore, or Toronto. Platforms such as BullionVault allow you to buy allocated silver held internationally. VAT is never triggered unless you request physical delivery to a UK address. If you sell back through the platform, no VAT crystallises.
Do I pay VAT on gold ETFs? No. Gold ETCs and ETFs are financial instruments, not physical metal. They are not subject to VAT. This applies to all major UK-listed gold ETCs — iShares Physical Gold (IGLN), WisdomTree Physical Gold (PHAU), Invesco Physical Gold (SGLD), and others.