A little while back, I spoke on buying bullion as a new hobby of mine. Maybe not great in investment terms, but still a wealth orientated collectable that should increase in value in the long run
Sadly, gold and platinum coins are too expensive to be purchased frivolously. But silver has an entry price suitable for my budget. My first purchase was a Brittania. Next was the Canadian maple leaf and the… erm… Dark Vadar…?
The Darth Vadar coin is a must for any Star Wars geek & is minted in New Zealand.
I now have a solid collection of coins from around the world which I pan to grow. All of these (aside from the 1st purchase) have been bought on www.SilverTrader.uk. I started to use Silver Trader because they had better prices than Bullion By Post & other similar silver sellers. I soon found out that there were other benefits too.
Using Silver Trader lets me pay via Paypal! For smaller purchases, I can use the ‘Pay after delivery’ option and pay 2 weeks after the purchase. For purchases over £150, I can use the ‘Paypal credit‘ option and pay interest-free as long as I finish paying within 4 months of the purchase. These options help soften the blow of VAT (value added tax) and expensive premiums. Paypal is beneficial to my cashflow as well.
Hi Martin, thanks for your time today. To begin with, can you tell me how did you get into silver selling?
That’s a long boring story.
Basically, I started stacking a little for myself and started trading in pre-decimals i.e. old silver coinage/silver proofs and a little bullion.
I was luckily or unluckily unemployed at the time, so I had a lot of time on my hands to learn about the older collectables and silver market and it turned into a small hobby just purchasing mainly old coins and turning them over then reinvesting in new ones.
I also heard a few theories about why there should not be any VAT (value added tax) on legal tender coinage and studied the commodity codes quickly discovering that the theory did not have a leg to stand on however at the same time I noticed that the commodity code for numismatics which was largely unused had a VAT rate of 5%, so I spent the next 6 months arguing my case with HMRC that silver bullion coins were numismatics and should be charged the correct rate of 5%, not 20%.
Believe it or not, HMRC were pretty good and honest and finally, after going through various tax legislation with the clarification department on the meaning of words and implied the intent of the law they agreed with me that under UK law the 5% commodity code should be applied much to my surprise.
However, the UK border force continuously ignored the paperwork and commodity code and kept charging me 20% forcing me to apply for refunds every time I imported a small amount of coins into the UK.
after about my third refund I took the UK border force to the parliamentary Ombudsman & after another year of fighting I won only to then be told by HMRC that there was a hidden Apex in the European Tax law which meant that due to the harmonisation process which overruled UK law the correct VAT rate was 20%. apparently, this Apex did not exist in the copy for HMRC so they had no idea until they were pointed to the hidden Apex on the European site (the mind boggles) This was way before the Brexit vote so it might get interesting again after we leave!
In the meantime, I had made a lot of contacts in the industry most of which thought I was a bit of a nutter for going through with all this, but it did seem to open a few doors. Up until then I had pretty much only traded from an online shop on E-bid & with a few listings on eBay. By the end of it, I had opened my eBay shop, gone self-employed and was starting to get my website designed.
What’s been the biggest challenge for your business so far?
Where to start lol The parliamentary complaint against the UK border force was a big one
mainly because it opened my eyes to how much of a joke the whole process & government agencies are.
To begin with:
a: The fact that there are apex’s in the European tax law that no one at HMRC even knew existed is frightening.
b: The fact that I had to argue with the supposed independent parliamentary ombudsman for the right to see the draft report at the same time as the UK border force (current procedure is for them to see the draft report ask for amendments to be omitted or sections of the report to be changed without reason or evidence & without me being allowed to know what was changed or omitted prior to the final report) considering the UK border force at no time provided any paperwork other than resubmitting the same paperwork I submitted. Literally! they just sent my paperwork back in.
The final result was that the UK Border force was found in maladministration on all counts! and 3 recommendations were made:
1. They had to apologise to me and my MP in writing.
2. Pay compensation of £200.
3. Outline procedures to me and my MP on how they were going to ensure that they would no longer ignore commodity codes and break the law.
The result was they sent me a half-arsed apology letter but neglected to send my MP one, I refused the £200 compensation out of principle and because I did not want to allow them to say they had paid compensation and could carry on as normal and finally no attempt was even made to inform me or my MP of any procedures or changes that would ensure that they would not do it again.
When I complained to the Parliamentary Ombudsman about the fact that the UK Border Force had not fulfilled 1 or 3 of the recommendations and had only fulfilled the second because I refused the compensation the Corrupt ex-border force employees of the Parliamentary Ombudsman closed the case saying they were satisfied with the result!
18 months to find out that the highest and only organisation in the country is purely there not to regulate government organisations and hold them accountable, but to cover up for them and allow them to continue without consequence. A complete joke but hardly surprising when its run by people who have to go back to work for the very organisations it’s supposed to regulate.
Other than that, the usual everyday things you have to fight with when running a business;
- The Royal Mail, who are still the best postal service to use in the UK but when something goes wrong boy do they know how to lie and cover their arses lol
- The Royal Mint who are by far the worst national mint in the world to deal with a complete lack of quality control, a returns procedure that can take up to 2 months and a constant stream of badly designed and made Silver bullion coins that makes me ashamed to be British!
- Fraudsters who try to rip you off mainly on eBay
- The Sheffield Assay Office which takes no pride in its work and is not fit for purpose
Basically, you must deal with a lot of problems not of your own making on a regular basis all of which takes up time and effort. I suppose if it was easy everyone would be doing it 🙂
Do you have a favourite coin?
Not really, I try not to get too attached to the coins I sell otherwise I might end up with a conflict of interest but 2016 was the Isle of Man Angel for me both for the quality, design and the history of the coin.
2017 was probably the Australian Dragon & Phoenix 1 ounce bullion coin just for the quality and design. I do like some of the beautiful designs that have come from the small company called treasures of Oz.
Small mintage proof coins such as the Unicorn, Pegasus and now the Poseidon. Perfect coins with an amazing amount of detail just beautiful to look at.
Not sure about 2018 yet but I do find myself becoming annoyed by the amount of badly thought out releases it’s almost like the market is becoming overrun by various mints who are just deliberately swamping the market with whatever they can quickly produce, basically quantity over quality!
Why should investors consider owning silver?
The biggest problem with silver over gold is the higher Premium and VAT, you are basically losing over 20% at the point of purchase, having said that the ratio of 80 to 1 or price of 80 ounces of silver to every ounce of gold is a complete joke and beyond belief so it seems like a good bet!
Sadly, that’s exactly what it is a bet!
If you look at the world at the moment, nothing is safe or secure
The markets are completely manipulated and overblown, cash is not secure in the banks since the laws changed to make people creditors and no longer depositors together with the push to change the deposit guarantee schemes in the EU to remove the protection on people’s savings accounts.
I can’t see a single thing that seems like a safe bet for the future
not crypto’s, savings, stocks, government bonds, property. It’s all just a gamble.
So, for me, Silver hedges a lot of bets as a collectable, as a precious metal and increasingly more for its industrial & technological uses. It will always have some value!
Where do you see the price of silver by the end of 2018?
Honestly, no idea & anyone predicting it is either wishful thinking or taking a guess.
In a market which is priced not on the physical metal but on paper contracts with no obligation to ever deliver the physical metal, it could be anything from £10 to £1000 an ounce. No amount of data, whether historical or actual has any real impact. Common sense is completely out of the window so ultimately it will come down to changes in world events.
let me put it this way, I would not be surprised to see silver at £5 an ounce but with no physical silver available for purchase or silver at £1000 an ounce with no one able to afford it or willing to exchange it for fiat currency at least for a time until the world corrects itself.
If I had to take a guess I would say it will creep up a little to about £15 or £16 an ounce, not because of the markets but more to do with the devaluation of currencies.
Thank you so much for those insights, Martin! I really appreciate it. Check out the Silver Trader website here www.SilverTrader.uk.