Scrap Gold - VAT

[brightidea]

Hi,

This should be a quick Q&A. I have searched for it in threads here to no avail.

Q - If I buy scrap gold from the domestic sector and trade to a bullion dealer who requires me to be VAT registered; do I have to pay the VAT to the domestic client?

A - ?

Thanks in advance...

Brightidea

 

[Jenni384]

No.

Your "supplier" is the domestic person selling the scrap, and they are not VAT registered. You pay them what you pay them, no VAT.

When the bullion dealer pays you, they buy the gold from you and typically will give you a self billing invoice. If the gold is past a certain purity, there is no VAT (it's accounted for backwards to prevent fraud). So effectively you will only ever receive your net amount.

Not all bullion dealers will require you to be VAT registered but, if you are, then you will need to supply them with your VAT number.

You may want to read the VAT manual on gold:
http://www.hmrc.gov.uk/manuals/vgoldmanual/vgold1000.htm

 

[brightidea]

Thanks Jenni,

Just what I needed. I only mention VAT as for a couple of Bullion Dealers it is a prerequisite. Unsure why but so be it.

Now just so I don't start threads all over the show, do you know if I need any licenses to buy/sell precious metal? Scrap.

Thanks again,

Brightidea

 

[Jenni384]

That I don't know, but I would guess not. I do have a jeweller client who does this, and to my knowledge they have not mentioned a licence (though that doesn't mean they don't have one!).

I believe it is good practice - if not required - to keep names and addresses of those you buy from. There may also be a requirement for taking ID, but I am not sure on this.