Notice 701/21
Gold
January 2000
This notice cancels and replaces VAT Leaflet
701/21 (1 April 1993 edition) and Update 1 to that edition.
- Date version agreed:
- Available from:
- Effective from: 1 January 2000
The major changes in this Notice relate to the
exempt VAT regime for investment gold which comes into force on 1 January 2000. It also
makes clearer the scope of the Special Accounting Scheme in relation to goods sold for the
value of the fine gold which they contain.
This Notice should be read in conjunction
with Notice 701/21A Investment gold coins.
Other VAT publications mentioned in this notice
(available free from any local VAT Business Advice
Centre) are listed at Appendix F
Do you have any comments?
We would be pleased to receive any comments or
suggestions you may have about this notice. Please write to:
VAT Communications
HM Customs and Excise
4th Floor West
New Kings Beam House
Upper Ground
LONDON SE1 9PJ
Contents
Glossary
1 Introduction
1.1 What this Notice explains
1.2 Gold - An overview of the
VAT treatment
1.3 Law
1.4 The legal status of this Notice
1.5 The European dimension
1.6 The London Bullion Market Association
2 Special scheme for investment
gold
2.1 What is investment gold?
2.2 The list of gold coins
2.3 Gold coins not included in Notice
701/21A Investment gold coins
2.4
Coin types and normal selling value
2.5 The Margin Scheme
2.6 The special scheme
2.7 Exemption
2.8 Partial exemption
2.9 Input
tax attributable to exempt supplies of investment gold
2.10
Input tax partly attributable to exempt supplies of investment gold and partly
attributable to other supplies
2.11 Option to tax
2.12 Opting to tax
2.13 Special
accounting arrangements for opted transactions
2.14 Accounting and record
keeping requirements
2.15 Notification
2.16 Invoicing requirements
2.17
Purchasing investment gold from persons not trading in investment gold
2.18 Special records
2.19 Internet and mail order
2.20 Sales to other VAT
registered businesses
2.21 Additional special
record for taxable persons
2.22 Simplified procedure
for small transactions
2.23 Retention of records
2.24 Auctioneers and other agents
2.25 Banks and other
financial service businesses
2.26 Imports and acquisitions
2.27 Exports and despatches
3 VAT
liability of transactions in gold, other than investment gold
3.1 General
3.2
Supplies between Central Banks and members of the London Bullion Market Association
3.3 Supplies of gold on
the London Bullion Market
3.4 Gold coins
3.5 Imports and acquisitions
3.6 Exports and despatches
4 The special
accounting scheme for gold transactions
4.1 The special accounting
scheme for gold
4.2 Coverage of the scheme
4.3 Operation of the scheme
4.4 Accounting arrangements
4.5 Work on goods, processing
and refining
4.6 Dealings on the terminal
market in gold
4.7
Issue of VAT invoices for supplies of gold covered by the scheme
4.8 Filling in your VAT return
4.9 Registration
4.10 Advice to gold dealers
smuggled gold
Appendices
A Extract from the Value Added Tax Act 1994, Group 15 to
Schedule
B List of bar and weights accepted by the bullion markets
C Traders in investment gold - form of Notification
D Liability of supplies of gold (other than investment gold)
E Special Accounting Scheme - Flow diagram
F Advice to gold dealers
G List of VAT Notices
Further help and advice
If you have a complaint
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Glossary of Terms used in this Notice
Throughout this Notice, the
following terms have the meanings shown:
Acquisition: receipt by a
person registered, or liable to be registered for VAT, of goods which have been supplied,
by a VAT registered trader in another European Community (EC) Member State and removed
from there to the United Kingdom.
Allocated: gold or gold coins
are allocated if they are set apart and designated as belonging to or reserved for
specific persons or purposes. The supply of allocated gold or gold coins is a supply of
goods for VAT purposes. If gold or gold coins are delivered they are, of necessity,
allocated.
Central Banks: these are the
Bank of England and its counterparts in other countries.
Despatches/despatched: the
removal of goods from the United Kingdom and their acquisition in another Member State by
a person registered for VAT in that state.
European Community (EC): the
territorial limits of the European Community for VAT purposes determine whether certain
supplies of services qualify for input tax recovery. Information about the limits is given
in Notice 741 Place of supply of services.
Fine gold: gold with a purity
level of 0.999. A good delivery bar is acceptable at 0.995.
Investment gold: Gold, of a
purity of not less than 995 thousandths that is in the form of a bar or wafer of a weight
accepted by the bullion markets. Also, certain gold coins (see "Investment gold
coins" below.
Investment gold coins: Coins
minted after 1800 which are of a purity of not less than 900 thousandths, which are, or
have been, legal tender in the country of origin, which are normally sold for a price not
exceeding 180% of the gold content of the coin. Also, coins which are included on either
of the lists included in Notice 701/21A Investment gold coins.
Live scrap: scrapped
jewellery, broken jewellery, watch cases, cigarette cases, etc,.
Scrap bar: melted scrap gold
cast into bar or button form.
Unallocated: gold and gold
coins are unallocated if they remain as an unidentifiable part of a larger stock held by a
supplier. The supply of unallocated gold or gold coins is a supply of a service for VAT
purposes. This service is a financial service for the purposes of Schedule 5 to the Value
Added Tax Act 1994; it is not, however, an exempt Financial Service under Schedule 9.
United Kingdom (UK):
references in this notice to the United Kingdom apply also to the Isle of Man unless the
text indicates otherwise. VAT is chargeable in the Isle of Man under Manx law which
generally parallels UK legislation. There is no VAT in the Channel Islands which are
outside the UK and European Community for VAT purposes.
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1
Introduction
1.1 What this Notice explains
This Notice explains how supplies, acquisitions
and imports of gold and of investment gold are treated for Value Added Tax (VAT) purposes.
There are three further sections :
- Section 2 introduces rules and
guidance in relation to the special scheme for investment gold;
- Section 3
explains the VAT liability of transactions in gold and gold coins other than investment
gold; and
- Section 4 describes the
special accounting scheme for gold.
1.2 Gold - an overview of the VAT treatment
Gold as a precious metal is crafted into
jewellery and watches, used in dentistry, in photographic and electronic manufacturing, in
decorative objects and in coins as legal tender. For investment purposes, gold is minted
or transformed into coins, ingots, bars and wafers to be held by individuals, banks and
countries as a store of value and a hedge against inflation. From 1 January 2000 gold
fulfilling certain criteria will be treated as investment gold (see paragraph 2.1). Certain supplies involving
investment gold will be exempt from VAT. The introduction of a VAT exemption for
investment gold does not affect the VAT liability of gold which does not meet the
definition of investment gold. Other supplies of gold will remain taxable at the standard
rate with the exception of certain transactions between Central Banks (see paragraph
3.2) and transactions on the London Bullion Market (see paragraph
3.2 and 3.3).
1.3 Law
The basic UK law governing VAT is
the Value Added Tax Act 1994 which implements the provisions of the EC Sixth VAT Directive
(77/388/EEC). Various Orders and Regulations made under the Act also affect supplies of
gold. The main ones are:
- The Value Added Tax Regulations 1995
- The Value Added Tax (Investment Gold) Order 1999
- The Value Added Tax (Terminal Markets) Order 1973.
1.4 The legal status of this Notice
Generally speaking, this Notice and other VAT
Notices and leaflets explain how Customs and Excise interpret VAT law. However, sometimes
the law says that the detailed rules on a particular matter will be set out in a Notice or
Leaflet published by Customs and Excise rather than in a Statutory Instrument.
This notice is published by the Commissioners of
Customs and Excise for the purposes of the following Orders and Regulations made under
sections 31(2) and 37(1) of the Value Added Tax Act 1994 and section 13 of the Finance Act
1999.
The Value Added Tax (Amendment)(No. 4)
Regulations 1999
The Value Added Tax (Investment Gold) Order 1999
The Value Added Tax (Importation of Investment
Gold) Relief Order 1999.
In this respect certain
paragraphs within section 2 have
legal force and supplement the law. These paragraphs are enclosed in boxes. As these
paragraphs have legal status, some legal wording has been necessary in the Notice. Plain
English has been used wherever possible.
1.5
The European dimension
The VAT exemption for investment gold described
in Part 2 of this Notice is being
introduced in all European Community Member States on 1 January 2000.
1.6
The London Bullion Market
The London Bullion Market is a commodity market
for the purposes of the Value Added Tax (Terminal Markets) Order 1973. Members of the
London Bullion Market are, for the purposes of the same Order, considered to be persons
who are members of the London Bullion Market Association.
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2 The special scheme for investment gold
Certain paragraphs within this section have legal
force and supplement the law. These paragraphs are enclosed in boxes.
2.1
What is investment gold?
This section deals only with transactions in
investment gold. If your transaction is in gold other than investment gold, you need not
read this section. The law, which is reproduced at Appendix A,
exempts investment gold from VAT. Investment gold is defined as:
(a) gold of a purity not less than 995
thousandths that is in the form of a bar, or a wafer, of a weight accepted by the bullion
markets;
(b) a gold coin minted after 1800 that-
- is of a purity of not less than 900 thousandths,
- is, or has been, legal tender in its country of
origin, and
- is of a description of coin that is normally sold
at a price that does not exceed 180% of the open market value of the gold contained in the
coin; or
(c) a gold coin of a description specified in Notice 701/21A Investment gold coins .
2.2
The list of gold coins
The European Commission have published a list of
gold coins which must be treated as investment gold in all EC member states. The list will
be updated annually. The purpose of the list is to provide business with certainty about
the VAT treatment of gold coins. VAT Notice 701/21A Investment
gold coins reproduces the EC Commissions list and has legal force in the UK.
All gold coins included within that Notice must be treated as investment gold for the
whole year for which it is published.
2.3
Gold coins not included in Notice 701/21A Investment gold
coins
As a general rule, coins not included in Notice 701/21A Investment gold coins are subject to VAT at
the standard rate. However, even if a coin is not in the Notice you may treat it as
investment gold if all the criteria outlined at paragraph 2.1 (b) are met.
You must be able to show from your business
records that any such coin meets the criteria.
2.4 Coin types and normal selling
value
All the coins that meet the definition at paragraph 2.1 (b) and (c) that have
the same denomination (face value), size and gold fineness, constitute a single
description or type for the purpose of the law. This is a wider definition of
type and description than is usually adopted by numismatists
because changes of superficial design do not alter the gold coin type for the purposes of
the exemption. Consequently, a gold coin type may be a single issue for one year, or have
been produced for almost two centuries, as in the case of the British sovereign.
Of the three criteria in paragraph 2.1(b), only the selling
value is subjective.
Coins are minted in various finishes and will be
sold at a variety of prices. If exemption depended on the actual selling price of an
individual coin this would lead to inconsistency. Administration of the exemption would
become burdensome for Customs and traders alike.
For this reason, exemption depends on the
normal selling price.
By this we mean the price that can most usually
be demanded for a particular type of coin. It does not matter that an individual coin is
of a special interest to collectors; if the usual value of the coin type falls within 180%
of the value of the gold contained therein, all coins of that type will be exempt.
Similarly, if a coin type is usually valued at more than 180% of the gold value, because
of its interest to collectors, but an individual coin is in such poor condition that it is
worth less than 180% of its gold value, that coin (like others of its type), will be
taxable and subject to normal VAT rules.
The normal selling price of coins is influenced
by the finish. Investment gold coins fall into two broad classes. The first consists of
relatively older issues made to circulate as currency. The second, generally more recent,
were primarily produced as a store of wealth. The first will normally be worn from
circulation. The second type may have been issued in a number of finishes and if the
majority of a type of coin are for example brilliant uncirculated quality
then, other things being equal, the brilliant uncirculated value will reflect the normal
selling price. On the other hand, if the majority of a particular coin are
proof, then the value of the proof coin will more likely reflect the
normal selling price. The test of normal selling price must take into account
these factors and be based on the condition in which the gold coin type is most frequently
traded.
If you are unsure whether the normal
selling value falls within the 180% criterion, you should contact your local VAT office.
2.5 The
Margin Scheme
Gold coins which are investment gold (see paragraph 2.2) are not eligible to be sold under
the Margin Scheme.
If gold coins which meet the definition of
investment gold have been included as purchases in margin scheme stock records the entry
should be closed and noted accordingly. If the coins have been included in Global
Accounting purchases, the items should be removed from the scheme and an adjustment made
to the total purchases in the period. In that period traders must deduct from their Global
Accounting purchase records the value they have attributed to the items.
Guidance can be found in paragraph
3.11 of Notice 718 Margin scheme for second-hand goods, works of art, antiques and
collectors items
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2.6 The
special scheme
Most financial investments, for example shares,
are exempt from VAT. Like shares, the value of gold is published. Investors would be
reluctant to invest in shares if they had to pay 17.5% more than the shares were worth.
The same is true of gold. The special scheme puts investment in gold on an similar footing
with other such investments by making it exempt from VAT.
Under the normal rules, businesses are unable to
reclaim input tax which is directly attributable to an exempt supply. Unlike shares, gold
may be purchased from a variety of taxable sources before being transformed into
investment gold. If the normal rules applied the input tax incurred on these costs would
not be reclaimable and so would increase the cost of the gold. To make a profit, the
seller would have no alternative but to pass on this cost to the investor. This would make
investing in the gold less attractive.
For this reason the scheme has three special
features.
- It allows certain taxable persons to opt to tax
certain transactions, so enabling them to reclaim all of their input tax (subject to the
normal rules).
- It enables taxable persons to reclaim the input
tax they incur on purchases of gold and on the costs of transforming any gold into
investment gold.
- It enables taxable persons who are producers and
transformers of investment gold to reclaim the input tax they incur on certain costs
linked to the production or transformation process.
Each of these are described in more detail below.
The special scheme for investment gold also
allows special procedures for transactions on the London Bullion Market. If you are a
member of the London Bullion Market Association, or are buying investment gold from or
selling investment gold to a member of the Association, you should contact your local VAT
office.
2.7 Exemption
The law relating to the exemption can be found in
Group 15 of Schedule 9 to the VAT Act 1994 and is reproduced at Appendix
A. The types of transaction concerning investment gold which are exempt are as
follows:
- Item 1 - A supply of investment gold.
- Item 2 - A supply which involves the conferring of
rights to take possession of investment gold. A supply of this description includes, but
is not limited to, supplies of unallocated investment gold, loans, swaps, forward and
future contracts concerning investment gold. This item does not include options (see
Appendix A, Note 3).
- Item 3 - A supply of services by an agent which
consists of attempting to bring about a supply within item 1 or 2 above for a named
principal, whether or not the agent is successful.
2.8 Partial
exemption
If you make exempt supplies and are registered
for VAT you may not be able to claim all of the input tax you incur. In general terms, you
can claim only input tax incurred on goods and services used, or to be used, in making
taxable supplies. You will find more about this in Notice 706 Partial
exemption. However, there are special rules about claiming input tax which relates
to supplies of investment gold. These are set out below.
2.9 Input tax attributable to exempt supplies of
investment gold
Although as a general rule you may not claim any
input tax you incur on goods or services which are used to make exempt supplies, you may,
exceptionally, claim the input tax you incur on some of the goods and services that are
attributable to your exempt supplies of investment gold.
If you are going to make exempt supplies of
investment gold you may claim VAT on the following directly related goods and services:
- the purchase of any investment gold on which you
have been charged VAT (for example because your supplier has opted to tax - see paragraph 2.11 & 2.12 below);
- the purchase of any other gold which is to be
transformed by you into investment gold;
- the costs of having your gold transformed into
investment gold.
If you actually produce or transform any gold
into investment gold yourself, you may also claim the VAT you incur on related goods and
services but only to the extent that they are linked to the production or
transformation process. For example:
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- Tools, tooling & equipment
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- Machinery, plant and fittings
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- Crucibles and furnace linings
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- Buildings & maintenance of buildings
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- Laboratory instruments and equipment
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- Fume abatement and effluent treatment
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You cannot claim any input tax that is not linked
to the production or transformation process. For example, input tax on a computer used for
recording exempt sales of investment gold cannot be claimed. If a building is to be used
for the production of investment gold which you sell exempt from VAT and an area is set
aside for the sale of that investment gold, the input tax on the building will have to be
apportioned to reflect the fact that only a part of it is linked to the production of the
investment gold.
If you opt to tax a particular supply of
investment gold (see para 2.11 below) you will be able
to claim all the related input tax as you will be making a taxable supply of
investment gold. To claim all your input tax, you will need to be able to show that none
of your input tax relates to any exempt supplies of investment gold.
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2.10 Input tax partly attributable to exempt supplies of
investment gold and partly attributable to other supplies
You might incur input tax on goods or services
which are used partly to make exempt supplies of investment gold and partly to make other
supplies. The normal rules for partial exemption require that input tax on any goods and
services exclusively used to make supplies is directly attributed to those supplies; Any
residual input tax has to be attributed to supplies in accordance with a method of
apportionment.
Since the right to deduct input tax in respect of
investment gold is limited, where mixed use occurs these normal partial exemption rules
will not fully identify the correct amount to be deducted. This is because attribution to
the supply alone will not determine the extent that VAT is allowable. There has to be a
further stage to identify allowable input tax. It follows that the standard partial
exemption method will not successfully identify allowable VAT and you will have to work
out separately how much input tax incurred in respect of any exempt supplies of investment
gold can be deducted.
If you make exempt supplies of investment gold
and you:
- are not a producer or transformer and do not
buy in transformation services, you may deduct only the VAT incurred on the investment
gold itself. If you receive a mixed supply part of which is investment gold that you
intend to supply partly as exempt investment gold and partly as other goods or services,
you will first have to work out the extent to which the input tax on the supply you
received is attributable to your various supplies. For the element attributable to your
exempt supply of investment gold, you will then have to work out how much of that input
tax relates to the gold itself. You cannot, for example, deduct any input tax incurred on
a separate delivery service of that gold.
- are not a producer or transformer but do
buy in transformation services, you may deduct the VAT you incur on the investment gold
itself (or other gold) and the VAT you incur on any outsourced transformation services. If
you incur any input tax which is in part attributable to your supplies of exempt
investment gold and in part attributable to your other supplies, you will first have to
work out the extent to which the input tax incurred is attributable your various supplies.
Then, for the element attributable to the exempt supply of investment gold, you will need
to work out the extent to which it relates to the gold itself and to the transformation
services.
- are a producer and/or transformer, you will
be able to deduct the VAT incurred on any related gold and also any VAT incurred on
production and/or transformation costs. If you incur any input tax which is in part
attributable to your supplies of exempt investment gold and in part attributable to other
supplies, you will first have to work out the extent to which that input tax is
attributable to your various supplies. Then, for the element attributable to the exempt
supply of investment gold, you will need to work out the extent to which it relates only
to the gold and production/transformation.
Example: A business buys a new building on which
it is charged VAT. Part of the building is to be used to produce exempt investment gold,
other gold and silver. Part is set aside as a sales area for these goods. Part is rented
out (an exempt supply). VAT on the building relates to:
- production and sales of investment gold
- production and sales of other gold
- production and sales of silver
- the rental
To know how much VAT the business can claim, it
will have to work out to what extent the building is to be used to make the supplies of
the non investment gold and silver, the extent that it is to be used to make the supplies
of exempt rental and the extent that the building is to be used to make the supplies of
exempt investment gold (including an element of the sales area). Having identified an
element that relates to the supplies of investment gold, the business will then have to
work out how much of this actually relates to the production of that investment gold. This
can be claimed in addition to the part that relates to the production and sales of the
other gold and the silver.
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2.11 Option
to tax
Under the special scheme for investment gold some
businesses may opt to tax certain transactions provided they meet certain criteria.
Even with the right of deduction it is likely you
will be unable to reclaim all of the input tax you incur. However, if you opt to tax a
transaction you may reclaim all directly attributable input tax. For this reason you may
wish to opt to tax.
However, you may only opt to tax supplies of
investment gold made to another taxable person. Supplies of investment gold to non-taxable
persons will always be exempt. In addition, you may only opt to tax investment gold coins
if you produce the coins yourself.
The following types of business may opt to tax.
(a)
Producers and transformers
If you are a taxable person who produces or
transforms gold into investment gold, you may opt to tax any supply of investment gold to
another taxable person.
You are required to notify your
local VAT office if you intend to make use of this provision. Your local VAT office will
send you an acknowledgement. If you do not receive an acknowledgement within 28 days, it
is your responsibility to check that Customs have received the Notification. |
(b) Other
taxable persons
If you are a taxable person, who as a normal part
of your business supplies gold for industrial purposes, you may only opt to tax supplies
of investment gold once you have been approved by Customs.
If you wish to be permitted to opt
to tax your supplies of investment gold, you must write to your local VAT office, giving
your VAT registration number and confirming that you normally trade in gold for industrial
purposes. If permission is given your local VAT office will send you a letter of approval
within 28 days. The letter will set out the conditions of our permission. |
We will accept that you normally supply
investment gold for industrial purposes provided you can show that you do so on a regular
basis.
Once you have received authorisation from us you
may opt to tax supplies of investment gold bars or wafers you make to other taxable
persons. You may not opt to tax supplies of investment gold coins.
Customs may withdraw authorisation for the
protection of the revenue.
(c) Agents
If you are an agent acting for a named principal
and your principal has opted to tax, you may opt to tax your services in so far as they
are related to your principals "opted" supplies of investment gold.
You must inform your local VAT
office that you intend to opt to tax your services. If you do not receive an
acknowledgement within 28 days, it is your responsibility to check that Customs have
received the Notification. |
2.12 Opting
to tax
Opting to tax a transaction is simple. Once you
have fulfilled the conditions in paragraph 2.11 above, all you need to do is to include
the following statement on your invoice.
"We have opted to tax this
transaction." |
Once you have opted to tax a particular supply,
the option is irrevocable. You cannot change your mind.
2.13 Special accounting arrangements for opted
transactions
By opting to tax a transaction in investment
gold, the transaction becomes subject to the special accounting scheme, also known as the
reverse charge procedure. Under this scheme the responsibility to account for
and pay the output tax falls to the purchaser.
If you intend to opt to tax you should also read paragraph 2.16 and section 4.
2.14 Accounting and record keeping requirements
There are special accounting and record keeping
requirements for persons who trade in exempt investment gold.
The requirements apply when:
- you sell exempt investment gold exceeding certain
values (see paragraph 2.22)
and
- the gold is delivered, or otherwise made available
to your customer
The requirements apply whether or not you are
registered or liable to be registered for VAT.
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2.15
Notification On the first
occasion that you make an exempt supply of investment gold which exceeds £5000 in value,
or when the value of your exempt supplies of investment gold to any one customer exceeds
£10,000 in any 12 month period, you must notify Customs at the following address:
The Gold COPE (City TTU)
HM Customs and Excise
Thomas Paine House
Angel Square
Torrens Street
LONDON EC1V 1TA
If you are required to notify that you trade in
investment gold and you are not registered for VAT, you must also provide the following
information:
1. Name of company, partnership or sole
proprietor.
2. Company Incorporation number or details of partners.
3. Address(es).
4. Telephone number.
5. Contact name.
6. Accountant name, address and telephone.
7. Associated VAT registration numbers.
You may, if you wish, use the form at Appendix C. Customs will send you an acknowledgement. If you do not
receive an acknowledgement within 28 days, it is your responsibility to check that Customs
have received the Notification.
You need not notify Customs of subsequent
supplies.
2.16
Invoicing requirements
a) normal requirements for exempt investment gold
You must issue an invoice for each supply of
investment gold. You must give each invoice a unique identifying number.
Each invoice must contain the following details.
You need only include those details which are appropriate.
- name and address of seller; your name and address
(if different to the seller); name and address of the purchaser; delivery address (if
different); unique customer reference (see paragraph
2.18 b);
- date of invoice; delivery date; type of supply
(for example, sale);
- if you, your principal or customer are registered
for VAT: your VAT registration number; the sellers VAT registration number (if you
are not the seller);
- a description of the gold supplied,
- for bars and wafers: form, weight and purity any
other identifying feature (including any proprietary mark, hallmark and serial number
where applicable); OR,
- for investment gold coins: the coin type, country
of origin and whether or not the coin is included on the list of gold coins reproduced in Appendix 1 of notice 701/21A investment gold coins.
- the number of items;
- total amount payable
b) simplified procedure for smaller transactions in
investment gold
If the value of the sale of exempt investment
gold is less than £5,000 and the total value of your sales of exempt investment
gold to that customer have not exceeded £10,000 in the last year, the invoice you issue
must contain the following details:
- a unique identifying number
- your name and address
- your customers name and address
- date of transaction
- a description of the gold supplied,
- for bars and wafers: form, weight and purity any
other identifying feature (including any proprietary mark, hallmark and serial number
where applicable); OR,
- for investment gold coins: the coin type, country
of origin and whether or not the coin is included on the list of gold coins reproduced in Appendix 1 of notice 701/21A investment gold coins.
- the number of items supplied
- total amount payable.
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If you sell investment gold on which you have
charged VAT (for example because you have opted to tax) you must comply with all invoicing
requirements for taxable transactions (see notice 700 The VAT
guide) and the requirements of the special accounting scheme for gold (see paragraph 4.7).
If you supply taxable items (including gold) and
exempt investment gold together you may include all the items on the same invoice,
provided the invoice contains all the appropriate details.
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2.17 Purchasing investment gold from persons not trading
in investment gold a) normal requirements for purchases of exempt
investment gold
Unless your purchase is covered by paragraph
2.17(b) below, if you purchase investment gold from a person who does not trade in
investment gold, you must issue an invoice on behalf of the seller containing all of the
relevant details specified in paragraph 2.16(a).
In addition, the invoice must bear the following
declaration which must be signed by the seller:
"I declare that to the best of my
knowledge the details shown on this invoice are correct."(signature and name ).
b) simplified procedure for smaller purchases of
exempt investment gold
If you purchase investment gold from a person who
does not trade in investment gold and the value of your purchase is less than £5,000 and,
if you have made more than one purchase from the same customer, the total value of those
purchases is less than £10,000 over the last year you must issue an invoice on behalf of
the seller containing the details set out at paragraph
2.16(b).
In addition, the invoice must bear the following
declaration which must be signed by the seller:
"I declare that to the best of my
knowledge the details shown on this invoice are correct."(signature and name ).
You must keep and maintain a copy of the invoices
issued under this paragraph with your purchase records.
2.18
Special records
Subject to paragraph 2.19, paragraph 2.20, paragraph 2.22, paragraph 2.25 and paragraph 2.27, if you sell exempt investment gold
which is delivered or available to be taken away by your customer, you must keep the
following information as part of your business records. This applies whether or not you
are registered for VAT.
a)
Accounting record: You must keep and maintain a record showing the
following details:
(i) Invoice number
(ii) Invoice date
(iii) Customer reference number
(iv) Customers VAT registration number (if applicable)
(v) Description of the gold (form, quantity and purity)
(vi) Name and address of the agent (if applicable)
(vii) Name and address of the purchaser
(viii) Transaction value
b)
Customer record: You must keep and maintain a record identifying customers
who purchase investment gold. This record must have a unique reference number and contain
the following information:
(i) Name
(ii) Date of birth
(iii) Current address
(iv) Telephone number if available.
You must take reasonable steps to ensure that
your customer has given you correct information. In order to do this, you must ask for and
examine at least one document from each of the following lists.
List 1 |
List 2 |
Passport |
Telephone bill |
Full driving licence |
Other utility bill |
National Insurance card |
Deeds |
Birth certificate |
Tenancy lease |
National identity card |
Council Tax bill |
|
Hotel key card (for non -UK
residents only) |
You may agree alternative satisfactory evidence
with your local VAT office.
If possible, you should keep a copy of the
documents you see. You should write on each copy "certified as original
document". You must sign and date this declaration.
If it is not possible to keep a copy of the
document you see, you must record, as part of your customer record, sufficient details to
enable Customs to obtain a copy if they so require. As a minimum you should record:
- the name of the document;
- the reference number; and
- the name and address of the issuing authority.
You must insist that your customer produces the
original document. You must keep the record up to date.
c) Method of keeping the
required particulars. Where you are required to keep and maintain the
records specified in parts a) and b) of this paragraph you may, as an alternative, keep
and maintain the details required in a manner which is convenient for your business
provided:
i) all the details specified are accessible for
inspection by a VAT officer; and
ii) you have agreed the format with your local VAT office.
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2.19
Internet and mail order
If you sell investment gold over the internet or
by mail order and you fulfil the conditions at (i) or (ii) below, you may as an
alternative to the customer record set out at paragraph
2.18 b), keep and maintain the following record:
i) if your supply is paid for by credit card and
the delivery address is also the card holders address, you must record the name your
customer, the credit card issuer and the card number; or
ii) if your supply is paid for by cheque, you must record the name of your customer, the
name of the bank and the account number of your customer;
Whether payment is by cheque or by credit card,
you must also keep proof of despatch of the investment gold to your customers
address.
2.20 Sales to other VAT registered businesses
If you sell investment gold to another VAT
registered business you may, as an alternative to the customer record described at paragraph 2.18 b), ask your customer for their VAT
registration number. However, you must check with your local VAT office that the VAT
registration number provided is authentic. |
2.21 Additional special record for taxable persons
If you are registered for VAT and you are:
i) authorised to opt to tax supplies of
investment gold, or
ii) a producer or transformer of investment gold,
you must keep and maintain with your VAT account,
in addition to the records set out in paragraphs 2.14 to 2.20, a record of any supply of
investment gold made to another taxable person where you have delivered or otherwise made
the gold available to them, and on which you have not opted to tax.
2.22 Simplified procedure for small transactions
You do not need to keep the records specified at paragraph 2.18 for supplies of less than £5000 unless
the cumulative value of your supplies to an individual customer in any one year exceeds
£10,000. However, you must be able to show from your business records that the value of
the investment gold supplied has not exceeded this limit.
2.23
Retention of records
You must retain all the documents and records
specified above for a minimum of 6 years from the date of the transaction. In the case of
regular customers, you must keep your customer record for 6 years following the most
recent supply of investment gold.
If you purchase investment gold you
must keep the purchase invoice you receive for a minimum of 6 years from the date of the
transaction. |
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2.24 Auctioneers and other agents
If an agent invoices goods in their own name for
goods sold on behalf of a third party vendor, the goods are treated for VAT purposes as
supplies both to and by the agent. Auctioneers are treated as agents for VAT purposes. For
more information about the VAT treatment of transactions by agents see Notice
700 The VAT Guide, section 10.
The agent or auctioneer is considered to be
making a supply of services to the vendor in return for commission charged, and if a
buyers premium is charged, they are also making a further supply of services to the
buyer.
It is important not to confuse the supply of the
goods with the supply of services to the seller or the buyer.
As the agent or auctioneer is treated as if they
were supplying the goods themselves, the special scheme applies to them in the same way as
it would apply to a principal. Supplies involving investment gold or investment gold coins
will be exempt, unless the agent sells to another taxable person and he opts to tax.
But remember you cannot opt to tax investment gold coins. For more information about
opting to tax see paragraphs 2.11 and 2.12. The
auctioneer will also have the same rights of deduction (see paragraphs 2.8 to 2.10) and is bound by the same
notification, record keeping and accounting obligations (see paragraphs 2.14 to 2.23, paragraph 2.26 and paragraph 2.27).
It is important that the agent or auctioneer
checks with the vendor before the sale whether the gold they are selling is investment
gold. If you are an auctioneer you should also remember that investment gold coins are not
eligible for the Auctioneers Scheme.
However, when an agent or auctioneer is acting in
their own name their supply of services to either the buyer or the seller will be taxable.
- Acting in the name of their principal
If the agent or auctioneer sells and invoices the
investment gold in the name of their principal, the supply of investment gold is made by
their principal. The agent supplies only his services. In this case, the agents services
will be exempt (see paragraph 2.7). The agent may opt to tax
their services if they are registered for VAT and their principal opts to tax their onward
supply of the investment gold (see paragraph 2.11(c)).
2.25 Banks and other financial service businesses
If you are a bank or other financial service
business which, for the purposes of the Money Laundering Regulations 1993 (S.I.
1993/1933), is considered to be a "relevant financial business" you may, as
an alternative to the customer record set out in paragraph
2.18b), keep and maintain the records specified in those regulations. Relevant
financial businesses to whom this applies must conduct the appropriate identification
procedures and keep the required records in the case of all transactions in investment
gold where the value of a one-off transaction exceeds 15,000 euro or, where two or more
one-off transactions appear linked and their value together exceeds 15,000 euro.
For the purposes of this Notice the exchange rate
between the euro and the United Kingdom Pound sterling shall be the rate published in the
Official Journal of the Communities. For the year to 30 December 2000 this rate is 1 euro
is equivalent to 0.6393 Pounds sterling.
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2.26 Imports and acquisitions
Imports and acquisitions of
investment gold from a place outside the UK are exempt from VAT. Imports of investment
gold from a place outside the EC must be entered to Customs Procedure Code (CPC) 40 00 63
in order to gain the exemption.
Further information on imports and acquisitions
is given in Notice 725 The Single Market and Notice 702 Imports.
2.27 Exports and despatches
The supply of investment gold
which is physically exported to a place outside the EC or despatched to a business in
another EC member state does not attract UK VAT. If you export investment gold you do not
need to keep the records described above. You are required to keep evidence of the export
or despatch. Further information is given in Notice 703 VAT: Exports
and removals of goods from the United Kingdom and Notice 704 VAT
Retail exports.
However, you may only deduct the input tax
allowable under paragraphs 2.9 or
2.10. This is because your supply would have been exempt if made in the UK. However,
if you opt to tax the export or despatch you are entitled to deduct all input tax
attributable to that supply (subject to the normal rules), even though no VAT is
chargeable.
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3 VAT liability of transactions in gold, other than
investment gold
3.1
General
This part relates to supplies,
acquisitions and importations of gold and gold coins other than investment gold. These are
generally standard-rated. Some transactions are specifically zero-rated. Details of these
exceptions are outlined in paragraphs 3.2 to 3.3 below. The liability of some of the most
commonly encountered transactions in gold, other than investment gold, is outlined in the
flow diagram at Appendix D.
3.2 Supplies between Central Banks and the London Bullion
Market Association
Group 10 of Schedule 8 to the VAT
Act 1994 zero-rates any supply between Central Banks or between a Central Bank and a
member of the London Bullion Market of:
- gold held in the UK;
- a right to acquire gold held in the UK;
- a part interest in gold held in the UK.
If you supply gold coins which
are legal tender and the supply meets the conditions for zero-rating under this Group, the
value of your supply is the total consideration you receive.
3.3 Supplies of gold on the London Bullion Market
Certain transactions in gold on
the London Bullion Market are zero-rated under the provisions of the Value Added Tax
(Terminal Markets) Order 1973.
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3.4
Gold coins
Supplies of gold coins which are
not investment gold (see paragraphs 2.1 to 2.5)
are subject to the normal VAT rules except in circumstances where goods are exported from
the UK or despatched to another EC Member State - see paragraph 3.6.
Although precious metals are
excluded from the second-hand margin scheme, gold coins (other than investment gold coins)
bought and sold as collectors items may be eligible as items of numismatic interest
(see Notice 718 Margin scheme for second-hand goods, works of art,
antiques and collectors items).
3.5 Imports and acquisitions
Importations and acquisitions of
gold and gold coins, other than investment gold (see paragraph 2.1) are chargeable with VAT at the
standard rate. However, importations and acquisitions of gold by Central Banks are subject
to special treatment (see paragraph
3.2).
Further information on imports
and acquisitions is given in Notice 725 The Single Market and
Notice 702 Imports.
3.6 Exports and despatches
The supply of gold, other than
investment gold (see paragraph 2.1), which is
physically exported to a place outside the EC or despatched to another business in another
EC Member State, is outside the scope of VAT with input tax recovery in accordance with
the normal rules. Further information is given in Notice 703 VAT:
Exports and removals of goods from the United Kingdom and Notice
704 VAT Retail exports.
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4 The special accounting scheme for gold transactions
Note: The
special accounting scheme for gold is compulsory. |
4.1 The special accounting scheme for gold
The special accounting scheme
for gold was introduced on 1 April 1993. The scheme is to be used for certain transactions
in gold between VAT registered traders, including those in investment gold where an option
to tax has been exercised under paragraphs 2.11 to 2.12
and transactions between a member and non-member of the London Bullion Market Association.
Under normal VAT procedures, a
VAT registered trader selling goods issues a VAT invoice and receives payment of price of
the goods and the VAT due on the sale. The seller then accounts to Customs for this VAT on
their next VAT return.
The scheme transfers the
responsibility for paying the VAT due to Customs and Excise on certain transactions in
gold from the seller to the buyer.
4. 2 Coverage of the scheme
The special
accounting scheme for gold must be applied when: |
- The seller and the buyer are both VAT registered
persons or are persons liable to be registered as a consequence of the transaction, or
other transactions.
- The supply by the seller is by way of business and
the buyer is making the purchase in connection with any business carried on by them.
The scheme
applies only to the following taxable supplies:
- Supplies of goods consisting of fine gold of a
purity of 0.995 or higher, and gold coins - except coins traded under the second hand
margin scheme. (Supplies of dental gold, gold targets and gold slugs are excluded.)
- From 29 November 1995 supplies of gold grain of
any purity are included in the scheme. Before that date only supplies of fine gold grain
were included.
|
- Supplies of goods containing gold for which the
amount paid or payable for the supply (apart from any VAT) does not exceed, or exceeds by
no more than a negligible amount, the open market value of the gold contained in the
goods. This includes supplies of scrap (including live scrap) and sweepings.
- The supply of the services of treating or
processing goods to make fine gold, gold grain or gold coins.
- From 1 January 2000, the supply of investment gold
where the seller has exercised the option to tax outlined at paragraphs
2.11 to 2.12 or where the supply is between a member and a non-member of the London
Bullion Market Association. The special accounting scheme applies to these transactions
regardless of whether the supply is classed as a supply of goods or a supply of services.
The open market value of the gold
is the "fix price" of the gold at the time of supply. This is the price set
twice a day in London by members of the London Bullion Market Association.
Gold coins, if
they are collectors items of numismatic interest, may be accounted for under the
margin scheme for second-hand goods, etc. (See Notice 718 Margin
Scheme for second-hand goods, works of art, antiques and collectors items.).
However, gold coins may not be sold under the margin scheme if they are investment gold
coins or if they were purchased under the special accounting scheme.
A flow diagram outlining the
scope of the scheme is at Appendix E.
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4.3 Operation of the scheme
If as a VAT registered person you
supply goods covered by the scheme (as outlined in paragraph 4.2 above), the goods must be
sold to another VAT registered person in order for the scheme to apply. You may therefore,
if you wish, ask your customer to provide a purchase order detailing the name, address and
VAT registration number appropriate to the business. |
Under the special scheme, a
purchaser of the gold pays the seller the VAT-exclusive price of the gold and must declare
the VAT due to Customs on their VAT return. At the same time the purchaser will deduct, as
input VAT, the amount of VAT shown on the seller's invoice (subject to the usual rules
covering the deduction of input VAT).
If you deal in gold you will need
to record the value of VAT accounted for under this scheme in your VAT account.
4. 4 Accounting arrangements
If you purchase gold under the
special accounting scheme for gold, you must account for tax on the value of the supply of
gold made by the seller. If you fail to do this, Customs may assess you for the output tax
due on the transaction.
If you purchase manufactured
goods containing gold which are held out for sale as such, and you pay over tax to your
supplier, you may be required to prove that your purchase did not fall within the
provisions of the special accounting scheme for gold. If you cannot prove this, you may be
treated as if you purchased gold and you will be required to account for the output tax
due under the special accounting scheme.
4.5 Work on goods, processing and refining
If you carry out treatment or
processing work on your customers goods, and the goods produced are fine gold, gold
grain of any purity, or gold coins, you must account for any charge you make for this
service under the special accounting scheme for gold. This means that you must issue an
invoice with the details set out in paragraph 4.7
and your customer must account for the output tax on your behalf.
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4.6 Dealings on the terminal market in gold
Supplies which are zero-rated under
the Terminal Markets Order are unaffected by the special accounting scheme for gold.
However, transactions between members of the London Bullion Market Association and taxable
persons who are not members of that Association are standard rated. In these cases, the
special accounting scheme applies. In such a case the LBMA member must raise a VAT invoice
as usual. This must bear the form of words detailed in paragraph 4.7
and the buyer is responsible for accounting for the sellers output tax.
4.7 Issue of VAT invoices for supplies of gold covered by
the scheme
If you make a supply of gold
under the special accounting scheme for gold, you must issue a VAT invoice to the buyer.
This must show all of the information normally required to be shown on VAT invoices (see Notice 700 The VAT Guide, paragraph 6.2 and (for
investment gold) paragraph 2.16 above).
However, the seller's invoice must include a form of words to the effect that the output
tax shown on the invoice is payable to Customs by the purchaser of the gold. The suggested
form of words is:
"£......output tax on
this supply of gold to be accounted for to Customs and Excise by the buyer."
The invoice must also show:
(1) the time of supply (or tax
point). This is ordinarily the date of delivery of the gold or the date when the gold is
made available for removal by the purchaser (see Notice 700 The VAT
Guide, section 5);
and
(2) a description sufficient to
identify the goods which includes:
- the weight of the gold;
- the purity of the gold;
- the number of individual items (where possible);
- the fix price of the gold on the day of delivery;
and
(3) the name and address of the
buyer; and
(4) the invoice date and number.
If you are approved to issue
self-billed VAT invoices, you must also show all of the above details.
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4.8 Filling in your VAT return
BOX 1: If you have purchased
gold, include the VAT due on your purchase of gold. The purchase of gold is treated as a
supply by you as well as by your supplier. You must account for the output tax in the same
period that you purchase the gold or it is made available for removal by you whether or
not you have sold it.
If you have sold gold under the
special accounting scheme, do not show the VAT shown on your sales invoice in this box.
In this box you must also show
output tax due on your other supplies under the normal VAT accounting mechanism .
BOX 2: In this box include
acquisition tax on any goods, including gold acquired from other EC member states.
BOX 3: Enter the sum of box 1
and box 2.
BOX 4: Include the VAT due on
your purchases of gold. (You may claim this in the normal way, subject to the usual
rules). In this box you must also show input tax deductible under the normal VAT
accounting mechanism on your other purchases and acquisitions.
BOX 5: Complete as normal.
BOX 6: Complete as normal. If
you have sold gold, enter the VAT-exclusive value of the sale. If you have purchased gold
include its value here. This is deemed to be a supply by you, as well as by your supplier.
BOX 7: Complete as normal.
Include the value of gold you have bought.
BOXES 8 and 9: Complete as
normal.
4.9 Registration
The special accounting scheme for
gold covers supplies of gold between taxable persons as outlined in paragraph 4.2. A taxable
person is someone who is either registered for VAT or who is liable to be registered for
VAT.
The supply of gold covered by the
scheme is treated as a taxable supply by the customer as well as by the seller for the
purposes of registration. In deciding if you are liable to register for VAT you must add
the value of your business purchases of gold to the value of other taxable supplies
which you make (including sales of gold) to arrive at your taxable turnover. So, if
you purchase gold in the course or furtherance of a business and you are not registered
for VAT, then you must consider whether you are liable to be registered as follows:
- if in a 12 month period your taxable supplies
exceed the registration threshold, you must notify your local VAT office within 30 days of
the end of the month in which the limit was exceeded: or
- if there are reasonable grounds for believing
that the taxable supplies which you will make in the next 30 days will
exceed the threshold, then you must notify your local VAT office within 30 days of the day
on which grounds first existed.
However, there are special rules
for persons who become liable to be registered for VAT solely by virtue of their dealings
in investment gold with members of the London Bullion Market Association. If you require
further advice you should contact your local VAT
office.
Further information on VAT
registration can be found in VAT Notice 700/1 Should I be
registered for VAT?. If you fail to notify Customs at the proper time you may
be liable to a financial penalty.
Once you are registered and you
receive supplies of gold in the course or furtherance of your business, which fall within
the scheme, you must account for your seller's output tax and you may reclaim your input
tax as indicated at paragraph 4.3.
If you sell gold that falls
within the scheme to a person who is not registered or liable to be registered for VAT,
you should charge and account for VAT in the normal way. Your purchaser should pay you the
full amount due including VAT.
If you purchase gold as a person
who is not VAT registered and you pay VAT to your supplier and later seek to register, you
may not be able to claim a deduction of input tax on gold held in stock at the time of
registration, if your supplier has not accounted for the output tax to Customs and Excise.
If you are a non-registered
person and you take delivery of gold as a capital asset of your business, and the value of
that gold is equal to or greater than the registration threshold, you must notify your
local VAT office. If you are not entitled to register or you are exempted from
registration, you must account for output tax on your purchase directly to Customs.
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4.10 Advice to gold dealers - smuggled gold
The use of the special accounting
scheme for gold does not alter the fact that all smuggled gold may be liable to
forfeiture. This applies even if the gold is found in the hands of an innocent
purchaser. It is therefore very important that, in your own interest, you look carefully
at the evidence of origin of any gold before you agree to buy it. Appendix
F sets out guidelines which will help you to satisfy yourself as to the origin of the
gold you are being offered.
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Appendix A
(referred to in paragraph 2.1 and paragraph
2.7)
Group 15 of Schedule 9
(Exemptions) to the VAT Act 1994
Item No.
1. The supply of investment gold.
2. The grant, assignment or
surrender of any right, interest, or claim in, over or to investment gold if the right,
interest or claim is or confers a right to the transfer of the possession of investment
gold.
3. The supply, by a person acting
as agent for a disclosed principal, of services consisting of -
(a) the effecting of a supply
falling within item 1 or 2 that is made by or to his principal, or
(b) attempting to effect a supply falling within item 1 or 2 that is intended to be made
by or to his principal but is not in fact made.
Notes:
(1) For the purposes of this
Group "investment gold" means -
(a) gold of a purity not less
than 995 thousandths that is in the form of a bar, or a wafer, of a weight accepted by the
bullion markets;
(b) a gold coin minted after 1800 that -
(i) is of a purity of not less
than 900 thousandths,
(ii) is, or has been, legal tender in its country of origin, and
(iii)is of a description of coin that is normally sold at a price that does not exceed
180% of the open market value of the gold contained in the coin; or
(c) a gold coin of a description
specified in a notice that has been published by the Commissioners for the purposes of
this Group and has not been withdrawn.
(2) A notice under Note (1)(c)
may provide that a description specified in the notice has effect only for the purposes of
supplies made at times falling within a period specified in the notice.
(3) Item 2 does not include -
(a) the grant of an option, or
(b) the assignment or surrender of a right under an option at a time before the option is
exercised.
(4) This Group does not include a
supply -
(a) between members of the London
Bullion Market Association, or
(b) by a member of that Association to a taxable person who is not a member or by such a
person to a member.
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Appendix B
(referred to in paragraph 2.2 and paragraph 4.6)
In paragraph 2.1 (a) of this notice and at Note
(1)(a) to Group 15, Schedule 9 to the VAT Act 1994, investment gold (other than investment
gold coins) is defined as: "gold of a purity not less than 995 thousandths that is
in the form of a bar, or a wafer, of a weight accepted by the bullion markets ".
For the purposes of this
definition bars and wafers are commonly traded in the following weights:
Unit |
Weights available |
London
Good Delivery Bar |
12.5 Kilogram |
Kilogram Bars |
1 Kilogram |
Gram (g) |
500 gram |
|
250
gram |
|
100
gram |
|
50
gram |
|
20
gram |
|
10
gram |
|
5
gram |
|
2.5
gram |
|
1
gram |
|
|
Ounce
(1oz = 31.1035 grams) |
100 ounce |
|
10
ounce |
|
5
ounce |
|
1
ounce |
|
½
ounce |
|
¼
ounce |
|
|
Tael
(1 tael = 1.1913 oz) |
10 tael |
|
5
tael |
|
1
tael |
|
|
Tola
(10 tolas = 3.75 oz) |
10 tola |
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Appendix C
(referred to in paragraph 2.15)
Persons who trade in
investment gold - form of notification
Write in BLOCK LETTERS only
This form is available in PDF format.
To: The Gold COPE (City TTU)
HM Customs & Excise
Thomas Paine House
Angel Square, Torrens Street
LONDON EC1V 1TA
Dear Sir/Madam,
In accordance with the requirements outlined in
paragraph 2.15 to Notice 701/21, Gold, I am writing to notify you that I am trading in
investment gold.
I am registered for VAT; my registration number
is ........................................
I am not registered for VAT; the details
requested in paragraph 2.15 of Notice 701/21 are as follows:
1. Name of
Company/Partnership/Proprietor..........................................................................
2. Company Incorporation number/details of
partners:.............................................................
3.
Address..........................................................................................................................
...........................
4. Telephone number
:..........................................................................................................
5. Contact name:
................................................................................................................
6. Accountants Full Name and
Address:...............................................................................
.........................................................................................................................................
7. Associated VAT registration numbers (if
any):....................................................................
Please acknowledge receipt
Signed......................First
Name.......................Surname..............................Dated.................
Status; Proprietor/Partner/Director/Company
Secretary/Partner/Authorised Person
(Delete as applicable)
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Appendix D
(referred to in paragraph 3.1)
Liability of supplies of gold
(other than investment gold)
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Appendix E
(referred to in paragraph 4.2)
Special accounting scheme -
scope of the scheme
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Appendix F
(referred to in paragraph 4.10)
Advice to gold dealers
The information in this Appendix
is intended as guidance for gold dealers who may be invited to purchase gold bullion, gold
coins and gold scrap.
Gold that has been smuggled may
be liable to forfeiture under the Customs and Excise Management Act 1979. This may
apply whether or not the gold is found in possession of an innocent purchaser. If you are
buying gold it is important to safeguard your own position by satisfying yourself, as far
as you reasonably can, that the metal has not been smuggled. You should satisfy yourself,
as to the answers to the following questions (by asking your supplier if necessary) before
agreeing to buy the gold:
1. Where has the gold come from?
2. Has it been imported from
outside the EC?
3. If 2 above applies, is there
evidence that the gold has been declared at import and that import VAT has been paid if
appropriate?
4. Why is it being sold and is it
offered for sale below market value?
5. How is it delivered and is it
available in the usual variety of types?
6. Is a quick settlement and/or
cash payment demanded?
7. Is the seller new and does the
seller have a fixed place of business?
8. Does the seller regularly
supply large quantities?
9. Has the seller references (a
bank, for example)?
10. Are there other grounds for
suspicion about either the standing of the seller or the origin of the gold?
It is not sufficient to confine
your questions to the past integrity of your supplier. When buying gold you should be
satisfied in all circumstances that it is safe to become involved in the transaction.
Where any person has been found to be dealing in smuggled gold, the Commissioners of
Customs and Excise will look very closely at the nature of the transaction and the degree
of care which was exercised in considering matters of forfeiture and possible criminal
proceedings.
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Appendix G
List of VAT Notices
700 The VAT Guide
700/1 Should I be
registered for VAT?
701/9 Terminal markets -
Dealings with commodities
701/21A Investment gold
coins
701/29 Finance
701/43 Financial futures and
options
718 Margin Scheme for
second-hand goods, works of art, antiques and collectors items
702 Imports
703 Exports and removals of
goods from the United Kingdom
704 VAT Retail Exports
725 The Single Market
741 Place of supply of
services
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Further
help and advice
If you need further help and
advice or more copies of Customs and Excise Notices, please contact your local Customs and Excise or VAT Business Advice
Centre as appropriate. You will find this in the phone book under 'Customs and
Excise'.
Whilst our officers will do their
best to help you, you should remember that they will not be responsible for advice given,
unless:
- all the factors relating to the query were
described; and
- in the case of queries which cannot be answered by
reference to a notice or leaflet, both your request for advice and the reply are given in
writing.
VAT Notice
700/51 VAT Enquires Guide gives information about making enquiries and the
standard of service you can expect from Customs and Excise.
Help and advice about how to keep
your VAT affairs in order can also be obtained from members of the tax accountancy
profession. However, there is no requirement to employ an accountant and if you choose to
do so, responsibility for the accuracy of your VAT affairs remains with you, the
registered person.
If
you have a complaint
If you have a complaint which the
staff at your local office or at the port or airport cannot resolve you should contact the
Collector for the region. Your local office will tell you how to contact the Collector.
Ask for a copy of our code of practice on complaints (Notice 1000).
If the Collector does not settle your complaint to your satisfaction, you can then ask the
Adjudicator to look into it.
The Adjudicator, whose services
are free, is an impartial referee whose recommendations are independent.
The address is:
The Adjudicator's Office
Haymarket House
28 Haymarket
LONDON SW1Y 4SP
Tel: 020 7930 2292
e-mail:adjudicator@gtnet.gov.uk
Fax: 020 7930 2298
Internet: http//www.open.gov.uk/adjuoff/aodemo1.htm
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