there is vat or not?gold scheme(scrapgold)?

Scrap gold bought from customer and sold to bullion dealer

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Anyone can help?

I am vat registered in UK

bullion delaer is vat register

customer (public) is not?

bought scrap gold from customer 5000 pounds and sold to bullion dealer with 10 percent margin 5500 pounds

bullion dealer pay 5500 showing self billing invoice

customer public did not paid vat and bullion dealer  created self billing invoice and paid only 5500 pounds

question is vat is payable or not?

i do not have to show in vat return and show in year end accounts ?  i do not know

the below boxes 

Box 1 - VAT due in this period on sales and other outputs.......Seems not here

Box 2 - VAT due in this period on acquisitions from other EC........No

Box 4 - VAT reclaimed in this period on purchases and other inputs....... Not here

Box 5

Box 6 - Total value of sales and all other inputs excluding any VAT........... 5500    i do not know is it correct to show in the box or not

Box 7 - Total value of purchases and all other inputs excluding any VAT .........5000? i don not know is it correct to show in box or not

Box 8 - Total value of all supplies to other EC memeber states ....... 

Box 9 - Total value of all acquisitions from EC Member States 

Replies (9)

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Portia profile image
By Portia Nina Levin
23rd Nov 2017 11:07

Not the question understand do I.

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Stepurhan
By stepurhan
23rd Nov 2017 11:11

Get proper paid-for advice now.

It sounds like you've already made mistakes on a comparatively simple transaction. You are likely to have made many others and not realised it. Get proper help before you dig yourself a hole you can't get out of.

Thanks (0)
avatar
By Ganesh
23rd Nov 2017 11:11

Vat is payable on scrap gold
if it payable which box

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Replying to Ganesh:
By Tim Vane
23rd Nov 2017 11:29

(sigh)

You (points)
must (?)
speak to (puppet hand)
an accountant (finger pressing imaginary calculator on palm of hand)

this (points to question)
is not (shake head)
the right place to ask (ok, I give up)

Thanks (1)
David Winch
By David Winch
23rd Nov 2017 11:32

There is a VAT special scheme for such transactions (including self-billing by the bullion dealer).
This is a technical area about which you need proper advice. Ask your accountant.
If you do not have an accountant, get one.
If you really think it best not to get an accountant then at least get the relevant leaflets from HMRC and study them carefully!
David

Thanks (2)
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By Justin Bryant
23rd Nov 2017 11:54

For investment gold (probably not scrap gold) physically located in the UK, Para 3.1 of VAT Gold Notice 701/21 requires that anyone who sells £5k+ of such gold should comply with the VAT reporting obligations at section 3 therein .

https://www.gov.uk/government/publications/vat-notice-70121-gold/vat-not...

The relevant legislation is SI 1995/2518 regulation 31A (2)(f).

Assuming no such report is made within the required 28 days of the sale, then under s69A VATA 1994 the penalty is up to 17.5% of the value of the gold; however, should HMRC raise a penalty, you could potentially argue that as a reasonable excuse the above Gold Notice is framed in terms of traders (per the wording of section 3.2 as “PERSONS WHO TRADE IN INVESTMENT GOLD – FORM OF NOTIFICATION”) , so you did not think that it should apply to one-off (non-trading) sales:
http://www.legislation.gov.uk/ukpga/1994/23/section/69A

http://www.hmrc.gov.uk/manuals/vcpmanual/vcp11713.htm
Assuming it's not investment gold, then there is no VAT exemption.

Thanks (1)
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By Ganesh
23rd Nov 2017 13:40

11.2 When does the scheme apply?
The special accounting scheme for gold must be used when:
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. The open market value of the gold is the ‘fix price’ of the gold at the time of supply, this is the price set in the twice-daily meetings by London Gold Fixing Ltd. This includes supplies of scrap (including live scrap - scrapped jewellery, broken jewellery, watch cases, cigarette cases etc) and sweepings. Supplies of part manufactured or finished jewellery, gold compounds and semi manufactured carated products, are excluded (except gold grain)

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Replying to Ganesh:
Portia profile image
By Portia Nina Levin
23rd Nov 2017 13:46

You don't have to worry about VAT on gold if you bought it from somebody that's not VAT registered. It's a new rule that was introduced in yesterday's budget. HMRC will update their publications in due course.

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By samuelterrence20
21st Jan 2020 05:19

is there vat paid back to businesses on scrap gold, so if I gave scrap gold into a refiner or bullion dealer is there vat credit paid back ?

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