Refunding VAT on silver bullion purchases as a VAT registered company

[Adam]

Hi,

I am a sole director and employee of a one-man VAT registered company. I voluntarily registered for VAT and my turnover does not exceed the VAT registration threshold. My company does technology-related consulting work.

I would like to convert my own cash savings (not from the company's accounts) into silver bullion.

Can you please advise me if it is lawful for me to buy silver with my own personal funds, and attempt to reclaim the VAT on the silver purchase by telling HMRC that this is a wealth preservation measure, to preserve the continuity of my business, in the event of a run on the GBP?

If not, what is the proper way to buy silver through my company in a tax efficient way?

What reasons do HMRC find acceptable to refund VAT on silver purchases?

Thanks.

Adam

[Martin Bonner]

On Friday, August 23, 2013 12:10:01 PM UTC+1, Adam wrote:
>
> I am a sole director and employee of a one-man VAT registered company.
>

> I would like to convert my own cash savings (not from the company's
> accounts) into silver bullion.
>
> Can you please advise me if it is lawful for me to buy silver with my
> own personal funds, and attempt to reclaim the VAT on the silver purchase

No.

> by telling HMRC that this is a wealth preservation measure, to preserve
> the continuity of my business, in the event of a run on the GBP?

But it's your wealth, not the company's.

> If not, what is the proper way to buy silver through my company in a
> tax efficient way?

Invest the cash in the company, and then the company can buy the silver.
It would be a company asset, and if the company folded, the
administrator would sell the silver to pay the creditors.

> What reasons do HMRC find acceptable to refund VAT on silver
> purchases?

It was purchased by the business, in the course of the company's
business.

I assume you that you have general purpose articles of association
which allow you to run mines and anything else you might feel like.
(And not specific "do technology-related consulting work".)

BEWARE: I am not a lawyer, or a VAT expert. I assume you talking
about investing more than three figures; get proper, qualified,
paid for, advice.

[Steve Firth]

Adam <ab22...@gmail.com> wrote:

> If not, what is the proper way to buy silver through my company in a tax efficient way?

To not do it. If you want to invest in silver or other precious metals and
to avoid VAT then the usual ways to do it are to invest in unit trusts that
are invested in mines or commodity linked structured products. These have
other drawbacks such as fees and service charges.

--
<•DarWin><|
_/ _/

[ab22...@gmail.com]

On Friday, 23 August 2013 13:20:01 UTC, Martin Bonner wrote:

> But it's your wealth, not the company's.

The company has just started up and has actually been running at a net loss for the past 2-3 years. The distinction between personal wealth and the company's becomes fuzzy under the circumstances because I have had to divert my income from other sources into the enterprise.

> It was purchased by the business, in the course of the company's
>
> business.

This is a wealth preservation measure to preserve continuity of the business at the end of a financial meltdown of the UK. The UK is running a net external debt of up to 900% GDP. Our government has no plans to pay off the debt or fix the spending deficit. We are headed for hyperinflation.

> I assume you that you have general purpose articles of association
>
> which allow you to run mines and anything else you might feel like.
>
> (And not specific "do technology-related consulting work".)

No such thing is mentioned. But arguably, a prudent director can decide to invest a portion of his own wealth (which will end up in the company) in assets which are immune to hyperinflation. Under the circumstances, a portion of my own wealth is the company's.

[steve robinson]

Its lawful if any profits are collected by your company (effectively
you have made a personal loan to the businessor increased your share
holding) and appear in the company accounts

If your trying to reclaim vat on personal investment that is not
lawful

[Chris R]

>
>
> wrote in message
> news:996eb2e3-e5ce-4cf6...@googlegroups.com...

You are heading for a lot of problems if you take that attitude. The
company's assets must be kept strictly separate from your own, and you need
to account carefully for transactions between you and the company.

In any event (and I am not a tax expert) even an entity registered for VAT
can only recover VAT on expenditure for the purposes of its trade, not for
investments. And if it could recover VAT it would then have to charge VAT
when it sold the silver, and you are likely to pay a lot more tax on any
profit than if you had invested personally.
--
Chris R

========legalstuff========
I post to be helpful but not claiming any expertise nor intending
anyone to rely on what I say. Nothing I post here will create a
professional relationship or duty of care. I do not provide legal
services to the public. My posts here refer only to English law except
where specified and are subject to the terms (including limitations of
liability) at http://www.clarityincorporatelaw.co.uk/legalstuff.html
======end legalstuff======

[R. Mark Clayton]

<ab22...@gmail.com> wrote in message
news:996eb2e3-e5ce-4cf6...@googlegroups.com...

On Friday, 23 August 2013 13:20:01 UTC, Martin Bonner wrote:

> But it's your wealth, not the company's.

The company has just started up and has actually been running at a net loss
for the past 2-3 years. The distinction between personal wealth and the
company's becomes fuzzy under the circumstances because I have had to divert
my income from other sources into the enterprise.


> It was purchased by the business, in the course of the company's
>
> business.

E.g. making jewelry or soldering circuit boards.

:This is a wealth preservation measure to preserve continuity of the

business at the end of a financial meltdown of the UK. The UK is running a
net external debt of up to 900% GDP.

No it isn't - it is running a worrying deficit of ~90% GDP.

: Our government has no plans to pay off the debt or fix the spending
deficit. We are headed for hyperinflation.

Yes it does - read the Budget statements FFS. Why else do you thing the UK
can borrow at 2%!

> I assume you that you have general purpose articles of association
>
> which allow you to run mines and anything else you might feel like.
>
> (And not specific "do technology-related consulting work".)

: No such thing is mentioned. But arguably, a prudent director can decide to
invest a portion of his own wealth (which will end up in the company) in
assets which are immune to hyperinflation. Under the circumstances, a
portion of my own wealth is the company's.

You are failing to distinguish between you and your company. In any event
many assets are relatively immune to inflation - landed property, any hard
commodity, securities, foreign currency etc.

[Stuart A. Bronstein]

ab22...@gmail.com wrote:
> Martin Bonner wrote:
>
>> But it's your wealth, not the company's.
>
> The company has just started up and has actually been running at
> a net loss for the past 2-3 years. The distinction between
> personal wealth and the company's becomes fuzzy under the
> circumstances because I have had to divert my income from other
> sources into the enterprise.
>
>> It was purchased by the business, in the course of the
>> company's business.

You really should have a formal arrangement whereby you either lend
the money or invest it. Each has its advantages and disadvantages -
talk to your accountant and solicitor about which might be best in
your case.

--
Stu
http://DownToEarthLawyer.com

[Fredxx]

I was thinking directors loan.

> If your trying to reclaim vat on personal investment that is not
> lawful

It might be better to purchase scrap silver from unregistered VAT sources!

[AlwaysAskingQuestions]

Martin Bonner wrote:
> On Friday, August 23, 2013 12:10:01 PM UTC+1, Adam wrote:
>>
>> I am a sole director and employee of a one-man VAT registered
>> company.
>>
>> I would like to convert my own cash savings (not from the company's
>> accounts) into silver bullion.
>>
>> Can you please advise me if it is lawful for me to buy silver with my
>> own personal funds, and attempt to reclaim the VAT on the silver
>> purchase No.
>
>> by telling HMRC that this is a wealth preservation measure, to
>> preserve the continuity of my business, in the event of a run on the
>> GBP?
>
> But it's your wealth, not the company's.
>
>> If not, what is the proper way to buy silver through my company in a
>> tax efficient way?
>
> Invest the cash in the company, and then the company can buy the
> silver. It would be a company asset, and if the company folded, the
> administrator would sell the silver to pay the creditors.

Can a director make a loan and take out a charge against a specific asset -
the silver bullion in this case - the same way as a bank can take a charge
against the property or other assets?

[...]

[Chris R]

>
>
> "AlwaysAskingQuestions" wrote in message
> news:b7rekr...@mid.individual.net...

Yes, so long as that does not conflict with anything else, such as security
given to the bank. But I'm not suggesting that is wise in this case.

[steve robinson]

unless you have the ability to check the purity of the silver then its
not the wisest of moves

[steve robinson]

Yes, however before going down that path it would be wise to get
proper legal advice.

[tim.....]

"AlwaysAskingQuestions" <alwaysaski...@gmail.com> wrote in message
news:b7rekr...@mid.individual.net...

well he can

but he'd still only be entitled to the same monetary value that he put in,
not the absolute value of the silver

tim

[Nogood Boyo]

"Adam" <ab22...@gmail.com> wrote in message
news:28e877ad-1052-4d17...@googlegroups.com...

[...]

> What reasons do HMRC find acceptable to refund VAT on silver purchases?

Why not ask HMRC? You'll find them very interested because of the level of
fraud associated with such transactions...

Nogood Boyo