Is Gold VAT Free in the UK? Gold vs Silver VAT Explained

If you’ve compared the price of a gold coin with a silver coin of similar value, you’ve probably noticed something odd: the silver often works out far more expensive once you factor in tax. That’s not a pricing quirk  it’s UK VAT law, and it treats gold and silver completely differently.
This guide explains exactly when gold is VAT free in the UK, why silver almost never is, and what that means practically for anyone buying bullion, coins or jewellery.

What Is VAT, and Why Does It Matter for Precious Metals?

Value Added Tax (VAT) is a consumption tax charged on most goods and services sold in the UK, currently set at a standard rate of 20%. It’s added to the sale price, so a product that costs £100 before VAT will cost £120 once VAT is applied at the standard rate.
For most goods, VAT is unavoidable. Precious metals are the exception  but only for gold, and only when that gold meets a specific legal definition of “investment gold.” This single distinction is responsible for one of the biggest cost differences between gold and silver investing in the UK.

Is Gold VAT Free in the UK?

Yes  but only gold that qualifies as investment gold under HMRC’s rules. This exemption is set out in VAT Notice 701/21 (Gold) and VAT Notice 701/21A (Investment Gold Coins), and its legal basis sits in Group 15, Schedule 9 of the VAT Act 1994.
The exemption isn’t a special favour for bullion dealers; it dates back to a UK-wide and EU-wide decision to stop taxing gold used purely as a monetary or investment asset, in the same way currency itself isn’t taxed. The result is that most of the gold sold by reputable UK bullion dealers, including
gold bars from LBMA-accredited refiners and gold coins such as the Gold Sovereign and Gold Britannia, are sold VAT-free to UK investors.

HMRC’s Definition of Investment Gold

For VAT purposes, gold qualifies as investment gold if it meets one of these two definitions:

•         Gold bars or wafers of at least 995 parts per thousand purity (99.5% fine), in a weight accepted by the bullion markets  this covers virtually every investment bar sold in the UK, most of which are 999.9 fine.
•         Gold coins that are at least 900 parts per thousand purity (90% fine), minted after 1800, are or have been legal tender in their country of origin, and are normally sold at no more than 180% of the open market value of the gold they contain.

HMRC publishes and updates an official list of qualifying investment gold coins each year (Notice 701/21A). Coins confirmed on this list include the Gold Sovereign, Gold Britannia, South African Krugerrand, Canadian Maple Leaf, American Gold Eagle and Austrian Philharmonic, among many others.

What Gold Is Not VAT Free?

•         Gold jewellery and ornaments  even 24-carat pieces  because they don’t meet the bar/wafer or approved-coin form required by the exemption
•         Numismatic or rare collector coins sold mainly for their rarity, design or historical value rather than gold content, where the price significantly exceeds 180% of the gold’s value
•         Gold used in industrial applications, electronics or dentistry
•         Decorative gold objects, medals or bars that don’t meet the recognised weights and purity accepted by the bullion markets

Is Silver VAT Free in the UK?

No. Unlike gold, there is no investment metal exemption for silver in UK law. Silver bullion  bars, coins and rounds, including those minted by The Royal Mint such as the Silver Britannia  are subject to standard-rate VAT at 20% when sold to a UK buyer.
This applies uniformly, regardless of purity, form or who mints it. A 1kg silver bar priced at £1,000 before tax will cost £1,200 once VAT is added, an immediate 20% premium that gold investors simply don’t pay on equivalent bullion.

Why Is There VAT on Silver But Not Gold?

This is one of the most searched questions on the topic, and the honest answer is that it comes down to how gold and silver have historically been classified in tax law, not their relative investment merit.
Gold has long been treated as a monetary metal  historically used to back currencies and settle international debts  and the investment gold VAT exemption reflects that special status. Silver, platinum and palladium have never been given the same treatment under UK or (previously) EU VAT law, regardless of how they’re used by investors today. It’s a legal and historical distinction, not a reflection of silver being a lesser investment.

Are There Any Ways to Buy Silver Without Paying UK VAT?

•         Some UK dealers offer silver stored in specific offshore or bonded vault schemes where VAT can be deferred, provided the silver isn’t physically brought into the UK  this only defers the liability, since VAT typically becomes due if the metal is later delivered domestically.
•         VAT-registered businesses purchasing silver for resale can usually reclaim the input VAT, though this doesn’t apply to private individual investors.
•         There is no way for a private UK buyer to legally purchase silver bullion for personal delivery in the UK without paying VAT at the standard rate.

A Brief History of the Gold VAT Exemption

The exemption isn’t a recent tax break. It dates back to 1 January 2000, when the UK (then still part of the EU VAT framework) implemented a Europe-wide agreement to remove VAT from investment gold. Before that date, gold bullion in the UK was subject to VAT just like any other commodity, which put UK bullion dealers at a competitive disadvantage against markets like Switzerland and the Channel Islands where gold could already be bought VAT-free.
The change was designed to let gold function as a genuine investment and store of value, rather than being treated as an ordinary consumer good. The UK retained this exemption in its own domestic VAT law after leaving the EU, and it continues to apply today under the VAT Act 1994 exactly as described above.

What About Selling Gold or Silver Back to a Dealer?

VAT is charged on a taxable supply  broadly, when a VAT-registered business sells something. If you’re a private individual selling your gold or silver to a dealer, you are not making a taxable supply, so no VAT is charged on your sale either way, regardless of whether the metal is investment gold or standard-rated silver.
VAT only becomes relevant again when the dealer resells that metal to the next buyer. For qualifying investment gold, that resale remains VAT-exempt. For silver, or for gold that doesn’t meet the investment gold definition (such as jewellery), many dealers use the VAT margin scheme when reselling second-hand items  meaning VAT is only charged on the dealer’s profit margin, not the full sale price, which is why second-hand jewellery doesn’t always carry a full 20% VAT charge for the next buyer.

Gold vs Silver VAT: Side-by-Side Comparison

Factor	Gold	Silver
VAT on investment bars	Exempt (if ≥995 purity)	20% standard rate
VAT on qualifying bullion coins	Exempt (e.g. Sovereign, Britannia)	20% standard rate (e.g. Silver Britannia)
VAT on jewellery	20% standard rate	20% standard rate
Legal basis	VAT Notice 701/21 & 701/21A	No equivalent exemption exists
Effect on £1,000 purchase	No VAT added	£200 VAT added (20%)
Capital Gains Tax on legal tender coins	Exempt (Sovereigns, Britannias)	Exempt (Silver Britannias only)

Why the Gold VAT Exemption Matters for Investors

The VAT exemption is one of the single biggest reasons UK investors choose gold over silver for a significant portion of their portfolio. A silver investment effectively has to grow by more than 20% before you’ve even recovered the VAT paid on the way in  silver has to outperform gold by a meaningful margin purely to break even on this one cost.
This doesn’t mean silver has no place in a portfolio. Many investors still hold physical silver for its industrial demand profile, affordability at smaller denominations, and diversification within precious metals. But the VAT difference is a structural cost that should be factored into any comparison between the two metals  see our guide on
gold vs silver: which should you invest in for a broader comparison beyond tax.

How This Affects Portfolio Construction

Because the VAT gap is a permanent, unrecoverable cost for private buyers, it changes the maths on how much of a precious metals portfolio should sit in gold versus silver. A £10,000 allocation split evenly between gold bars and silver bars doesn’t buy the same £5,000 of metal in each case once VAT is applied  the silver portion effectively buys around £4,167 of metal plus £833 of tax, while the gold portion buys the full £5,000 of metal.
This is one reason many UK investors treat silver more as a tactical, smaller allocation  valued for its lower entry price per unit and industrial demand story  while using gold as the core, tax-efficient long-term holding. It isn’t a reason to avoid silver altogether, but it is a cost that should be priced into any expected return comparison between the two metals.

VAT vs Capital Gains Tax: Don’t Confuse the Two

VAT and Capital Gains Tax (CGT) are separate taxes that apply at different points in the ownership of gold or silver, and investors frequently mix them up.

•         VAT applies (or doesn’t) when you buy an item  it’s a one-off cost built into the purchase price.
•         CGT applies when you sell an item at a profit; it’s a tax on the gain, assessed later, and depends on whether the coin counts as UK legal tender, not on its VAT status.

This is why Gold Sovereigns and Gold Britannias are unusually attractive: they benefit from VAT exemption on purchase and Capital Gains Tax exemption on sale, giving them a tax-efficient position at both ends of ownership. Silver Britannias share the CGT exemption on sale, since they’re also UK legal tender, but they don’t share the VAT exemption on purchase, because silver isn’t investment gold.

Common Mistakes Investors Make

•         Assuming all gold products are automatically VAT-free  jewellery and certain low-purity or decorative gold items are not.
•         Assuming silver Britannias are VAT-free because they’re legal tender like Sovereign’s  legal tender status affects CGT, not VAT.
•         Confusing a VAT-inclusive silver price with a “premium”  , a large part of what looks like a high dealer premium on silver is actually the 20% VAT, not dealer margin.
•         Believing storing silver offshore removes the VAT liability permanently, rather than simply deferring it until the metal is brought into the UK.

Frequently Asked Questions

Is gold VAT free in the UK?

Yes, for investment-grade gold  bars and wafers of at least 995 purity, and qualifying bullion coins such as the Gold Sovereign and Gold Britannia. Gold jewellery and non-qualifying items are still subject to standard-rate VAT.

Is silver VAT free in the UK?

No. Silver bullion, including bars and coins like the Silver Britannia, is subject to standard-rate VAT at 20%. There is no investment metal exemption for silver under UK law.

Why is there VAT on silver but not gold?

Gold has historically been classified as a monetary metal in UK and EU tax law, which is why it received a specific investment gold VAT exemption. Silver, platinum and palladium have never been given equivalent treatment.

Do you pay VAT on gold bars?

No, provided the bar is at least 995 parts per thousand purity and in a weight recognised by the bullion markets  this covers the vast majority of investment gold bars sold in the UK.

Do you pay VAT on gold coins?

Only if the coin doesn’t meet HMRC’s investment gold coin criteria. Coins such as the Sovereign, Britannia, Krugerrand and Maple Leaf are on HMRC’s approved list and are VAT-free.

Is there VAT on gold jewellery?

Yes. Gold jewellery is standard-rated at 20% VAT because it doesn’t meet the bar/wafer or approved-coin form required for the investment gold exemption.

Are Gold Britannias VAT free?

Yes. Gold Britannias meet HMRC’s investment gold coin criteria and are exempt from VAT.

Are Silver Britannias VAT free?

No. Although Silver Britannias are UK legal tender (which makes them Capital Gains Tax exempt), silver is not covered by the investment gold VAT exemption, so standard-rate VAT applies.

How much VAT is charged on silver in the UK?

Silver is subject to the standard UK VAT rate, currently 20%, when sold to a private individual for delivery in the UK.

Is there VAT on gold sovereigns?

No. Gold Sovereigns are on HMRC’s approved list of investment gold coins and are exempt from VAT.

Can I avoid paying VAT on silver in the UK?

Not for silver delivered to you in the UK. Some dealers offer offshore vault storage where VAT can be deferred, but it generally becomes due if the silver is later brought into the country.

Is platinum VAT free in the UK?

No. Platinum and palladium are treated the same way as silver for VAT purposes  there is no investment metal exemption, so standard-rate VAT applies.

What is the legal basis for the gold VAT exemption?

The exemption is set out in Group 15, Schedule 9 of the VAT Act 1994, with detailed guidance in HMRC VAT Notice 701/21 (Gold) and 701/21A (Investment Gold Coins).

Does the gold VAT exemption apply to all countries’ gold coins?

It applies to any coin that meets HMRC’s purity, age, legal tender and pricing criteria, regardless of country of origin  which is why coins like Krugerrands and Maple Leafs qualify alongside British coins.

Is VAT the same as Capital Gains Tax on gold?

No. VAT is charged when you buy gold (if it doesn’t qualify as investment gold); Capital Gains Tax may apply when you sell gold at a profit, depending on whether it’s UK legal tender. They are assessed independently of each other.

Key Takeaways

•         Investment-grade gold  bars ≥995 purity and HMRC-approved bullion coins  is exempt from VAT in the UK.
•         Silver bullion carries standard-rate VAT at 20%, with no equivalent investment exemption.
•         Gold jewellery is VAT-standard-rated regardless of purity, because it isn’t in bar or approved-coin form.
•         VAT (purchase tax) and Capital Gains Tax (tax on profit at sale) are separate  don’t assume one exemption implies the other.
•         Sovereigns and Britannias are unusual in being exempt from both VAT and CGT, making them especially tax-efficient for UK investors.

Where to Learn More

For the full picture on how gold is taxed once you come to sell, read our companion guide to Capital Gains Tax on Gold in the UK. If you’re deciding between formats, our guide on gold bars vs gold coins covers the practical differences beyond tax, and you can browse current gold bars and gold coins available to buy VAT-free.