Why You Should Invest in VAT-Free Silver & Platinum

Is VAT-Free Silver & Platinum a Valid Option?

The quick answer is that VAT-Free silver & platinum can be a fantastic investment option for those who make the most of 'Loco storage options' such as Loco Zurich or Loco Frankfurt. No, this doesn't refer to the 'crazy cities of Switzerland and Germany.' However, you would be insane not to know about this, as it could help you maximise profits for your precious metal portfolios in the years to come if the price of silver and platinum increases.

Q1-25 Performance of Silver & Platinum

As of Thursday, 16th January 2025, we are in the third week of 2025, and the performance of silver has started strong. In the first quarter of 2025, silver has increased from £23.08 to £25.33, representing a 9.75% increase in just the first three weeks of 2025. Silver is also at its highest price since October 30, 2024, when the price reached £26.53 per ounce in United Kingdom sterling (British Pound). Similarly, for platinum in the first quarter of 2025, the metal saw a significant increase, reaching a high of £798 from £723 at the start of the quarter, which is over a 10% increase.

Now, if you bought at the start of the quarter for 2025 for either of the metals mentioned, would you have made a profit? The answer is no! Now, what if we told you that when you purchase silver, you must pay 20% on top of the investment as VAT if you're a UK investor? This means you have not benefited as much as you could have. By utilising Loco storage options in Zurich and Frankfurt, you can avoid the 20% VAT. With our example, you would have made a profit as the silver or platinum is stored in Zurich or Frankfurt.

What Is The Definition of Loco In Precious Metal Investment?

To help you understand what Loco Zurich or Loco Frankfurt means, we will review the definitions provided by reputable sources and break down the terms to understand their meanings. Leading onto why you may want to opt for our vaulted storage overseas service for your physical silver and platinum in Zurich or Frankfurt, to avoid paying VAT. 

Loco: Loco is the short abbreviation for location.

Zurich: Zurich is a city in Switzerland.

Loco Zurich means in respect of an account holding bullion, the custody, trading or clearing of such bullion in Zurich, Switzerland (See Source)

London Bullion Market Association Definition

Loco Zurich is simply a metal trade where the metal part of the transaction settles over accounts held in Zurich. (See Source)

Similarly, 'Loco London' is another term, used like 'Loco Zurich,' but instead of the metal being stored or traded in Switzerland, it is stored in London. Loco London is also associated with the London Bullion Market Association (LBMA), an international trade association specialising in over-the-counter (OTC) trading for gold and silver bullion. Today, LBMA refiners oversee the annual production of 5,000 tonnes of gold and 30,000 tonnes of silver via OTC trading. Around $25 billion USD worth of gold transactions are finalised daily within the global OTC market, with London acting as its primary hub.

Why Are Loco Storage Options Important for Silver & Platinum Investors?

The term 'Loco Zurich' is the storage of your bullion in a secure vault situated in Zurich, Switzerland. This arrangement exempts you from VAT obligations, resulting in a higher quantity of metal for your investment. VAT charges would apply only in the event of a future delivery request for your investments.

However, our Loco Zurich range and Frankfurt VAT-Free silver 1 oz coins options are only intended to be sold as a 'storage-only' item and is not a cost-effective option should you ever wish to take delivery. Costs to take delivery or collect will include handling fees, customs clearance charges, and even tax liabilities.

Are Loco Storage Options Secure?

Swiss and German storage facilities are well-known for their outstanding security and confidentiality benefits, capitalising on their stable political environments and strong legal systems. With strict privacy regulations and a history of banking confidentiality, these facilities prioritise privacy and protect valuable assets and sensitive data. We do charge minimal storage fees for Loco Zurich and Loco Frankfurt products, but this is still considerably cheaper than having them delivered.

What is Value Added Tax (VAT)?

European Union Definition: VAT is a general, broadly based consumption tax assessed on the value added to goods and services. (See Source)

This consumption tax was regulated by Brussels, until the UK formally withdrew from the EU in January 2021. The UK standard VAT rate is currently 20%, which has been the case since the rise from 17.5% in January 2011. You can work out how much tax you are paying by dividing the sales amount by a value of 6. This means for every £100 you spend you are paying £16.66 in tax, which is quite a significant amount.

Some products such as milk, books, children’s clothes and take away food carry no tax and are classified as zero rated. Newspapers are zero rated (note their digital counterparts are taxable), maps are zero rated and energy supplies are usually 5%.

More relevant here is that gold has been exempt from VAT since January 1st 2000 but silver, platinum and palladium have remained subject to the standard rate. This makes gold a much better investment if your funds allow but that's not to say silver (at the right time) doesn't make a great investment. If you believe the price of silver to be low you can offset the VAT amount when selling at the higher price.

How Much Have London Good Delivery VAT-Free Silver Bars Increased In Value?

As mentioned earlier, so far in Q1-25, silver has seen an increase in total value per ounce, rising by 9.75% in British Pounds. For a fairer comparison, let's look at the silver price data from the last three months, covering the period from Wednesday, 16th October to Thursday, 16th January.

Figure 1 - Silver Price Last 3 Months per Ounce (GBP) (16/10/2024 - 16-01/2025)

Each VAT-Free silver bullion good delivery bar contains, on average, 1000 ounces of silver. Consequently, if you had invested in one of these bars just three months ago, the value per ounce of silver would have increased by 4%. If you sold it during this time period, you would need to consider the premium at which you purchased it and factor that into the total profit earned.

1000 oz Silver VAT-Free Good Delivery Bar - Loco Zurich Storage

These investment-grade Silver Bullion Good Delivery Bars are London Bullion Market Association (LBMA) approved 1000 oz silver bars selected from a variety of LBMA-approved refiners, containing approximately 31.1 kilograms of pure, 999 fine silver.

It's important to note that London Good Delivery silver bars can weigh between 750 troy ounces (23 kilograms) and 1,100 troy ounces (34 kilograms). However these bars contain approximately (between 930 and 1,080 troy ounces). You will only pay for the exact metal weight of the ordered bar, plus the premium.

View Product

CGT Exempt & No VAT

We have an excellent range of products that are capital gains tax exempt, including all coins classified as British legal currency.

VAT Free Silver 1 oz CGT Exempt Coins - Our Choice Chards

VAT Free Silver 1 oz CGT Exempt Coins - Loco Zurich

These VAT-Free British 1 oz silver coins will be chosen on an 'our choice' basis, which may include Britannias or Royal Mint lunar coins. All will contain one ounce of fine silver, struck in .999 fineness.

Quantity	Premium	Price Per Item	Total	Total
1	£17.00	£73.46	£73.46	£73.46 Price Per Item: £73.46 Est UK Delivery £6.00
5	£16.95	£73.41	£367.05	£367.05 Price Per Item: £73.41 Est UK Delivery £6.00
10	£16.90	£73.36	£733.60	£733.60 Price Per Item: £73.36 Est UK Delivery £6.00
25	£16.50	£72.96	£1,824.00	£1,824.00 Price Per Item: £72.96 Est UK Delivery £7.00
50	£16.00	£72.46	£3,623.00	£3,623.00 Price Per Item: £72.46 Est UK Delivery £13.00
100	£15.80	£72.26	£7,226.00	£7,226.00 Price Per Item: £72.26 Est UK Delivery £30.60
250	£15.60	£72.06	£18,015.00	£18,015.00 Price Per Item: £72.06 Est UK Delivery £38.60
500	£15.20	£71.66	£35,830.00	£35,830.00 Price Per Item: £71.66 Est UK Delivery £64.20
1000	£15.10	£71.56	£71,560.00	£71,560.00 Price Per Item: £71.56 Est UK Delivery £129.40
2000+	£15.00	£71.46	£142,920.00	£142,920.00 Price Per Item: £71.46 Est UK Delivery £245.20

View Product

VAT-Free Vs Marginal VAT Silver Online?

The UK has a special margin scheme for secondary market silver where you only pay VAT on the profit you make when you come to sell. This means if we sell a silver coin for £20 that we have previously bought for £15, we would only pay VAT (at 16.67%) on the £5 profit or 83p. Likewise if you were to sell the coin onward for £30, you would then pay VAT on you £10 profit which at 16.67% is £1.67.

Conclusion

In conclusion, for investors looking to invest in silver and platinum without paying VAT on bullion, Loco storage options offer a strategic solution. By exploring VAT-free silver and platinum purchases, understanding their benefits, and navigating the buying process, you can enhance your precious metal portfolios while mitigating tax implications.