VAT was abolished on investment gold as from January 1st 2000.
This includes gold sovereigns, krugerrands, other bullion gold coins, and certain types of gold bars.
The final list and definition of investment gold is yet to be announced, but does include most gold coins which are normally sold at under 80% premium over their intrinsic metal value. This is includes almost all modern gold coins, including all gold sovereigns and proof sovereigns.
From January 1st, 2000, qualifying coins are exempt from VAT instead of zero rated

VAT Was Introduced in 1973 on Gold Coins
For the first time in over 26 years, United Kingdom residents will be able to purchase gold as an investment without the imposition of VAT
The BNTA, British Numismatic Trade Association was formed in 1973 by the major UK dealers in order to liaise with Customs & Excise about VAT on coins, whether antique, modern, gold, silver or base metal.
Special Scheme
For many years, we operated a "brokerage" scheme on gold coins enabling us to match private buyers and sellers, so as to legitimately avoid VAT on sales and purchases of coins already in private ownership.
In January 1996, the "Special Scheme" for antiques was extended to most classes of second-hand articles, including gold coins, enabling us to sell "second-hand" sovereigns with VAT payable only on our margin.
This often meant, however that we could not meet large orders rapidly, as we had to rely in buying solely from private vendors, or other dealers operating the special scheme.