Refiner in the UK - VAT

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eddie0737

Member
Joined
Nov 7, 2009
Messages
10
Hi all,

Been lurking on and off now since 2009. In the last 6 months I have finally got things moving and done some small scale processing using Steve AP process for boards.
To cut a long story short when dealing with refiners in the UK. I seem to come up against a common issue in my quest to get the best prices - 98% plus. The issue is one regarding VAT and specifically the fact that I am not VAT registered. According to some they cannot give me the best rate due to the Special Accounting Scheme

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000104&propertyType=document#P428_36398)

This means that they have to account for VAT differently and so this impacts on the rates they can give. 98% is out of the question and I have been quoted more like 90% for a 5oz ingot that I have assayed. It is coming in at 52.3% AU. Even if I had a higher assay it would prove difficult to get near 95%

Can any one recommend a refiner in the UK ( I am based in London ) who is happy to deal with non VAT reg people and can offer near 98% of the London Fix? Happy to travel as long as it is within the UK

Thanks
 
Eddie your been fed rubbish here. There is no VAT on gold bullion or scrap it's accounted for in the returns very simply under goods exempt. There are plenty of buyers who should pay better than what you have been quoted, I'd happily pay you 95% all day every day if our assays agree.
 
Hello all , how are tricks?
I hope all is well!
For sure , investment gold in the U.K. is exempt from VAT , for refference ;
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&id=HMCE_CL_000104&propertyType=document
All the best with it , and kind regards for now ,
Chris :mrgreen:
 
Hi


Thanks for the response guys.

The ingot that I wish to sell to a refiner is classed as scrap ( AU of 52.3% ) not bullion as far as UK tax is concerned -

Nick, so basically it makes no difference to the refiner if you are VAT registered or not, as far as their VAT accounting is concerned? This runs contrary to what I have been told. Perhaps as a newbe I have been "lead down the country path" on this issue. I hope that is the case, as I need to turn over 73K to get a VAT number. Furthermore HMRC are very funny about people pre registering for VAT at the moment, especially if it involves the words gold,refining and waste/scrap.

Allot of refiners will only deal with VAT registered players. An example of this is Presman's website ;http://www.mastermelts.co.uk/Pages/scrap.asp. Maybe this is used by some refiners as a "smoke screen" as they want to deal with larger players who would be VAT registered. Clients who are likely to give them more volume than hobbyists and small scale operators like myself.
Would I be right in this assumption??

Thanks

eddie
 
Gold was removed from the VAT scheme many years ago but it applies if you buy wire or sheet, findings,stampings or castings VAT is chargeable but fine gold, coins, casting grain and scrap are exempt but the buyer is usually responsible for any VAT on the gold that may become liable, it's to stop people scamming the customs and excise and disappearing with the VAT money, so selling doesn't need a VAT number, there is VAT on silver and platinum and there are those who try to run scams with those metals, too risky for my liking but some people just don't seem to care.
You should be able to find a better buyer than you have at present.
 
Nickvc, thanks for the response and clarifying the issue.

Perhaps I need to do more searching in order to find a better buyer.

On a side note after speaking to HMRC regarding pre registration, it is a definite no no. Unless you are very close to turning over more than 73K. They are sending all pre registration applications to their office in Cardiff for enhanced security checks and coming down hard on any one attempting to evade VAT. They will throw the book at anyone actually involved in a dodgy VAT scheme. Those people you mentioned should be looking over their shoulders.

eddie
 
As your based in london i find it surprising that your only getting offered 90% or so, i scrap at a place in london, they also refine and assy etc i get 97.4% non vat for scrap.
 
Hi Eddie,

I've been registered self employed for 6 years and am studying accountancy. I am just starting on the VAT section (as I've never been registered) but as I understand it, anyone can register for VAT regardless of turnover. It is beneficial in some cases, [say if you are exporting, you claim back the VAT you paid on goods but when you resell there is nothing to pay as you are selling in another country....]

But, as soon as you have a month that suggests you are likely to turnover 73K then you MUST register for VAT without exception.

They are cracking down at the moment, but not registering (and not paying) when you should is the problem.

I'm very confused that the IR advised you the other way???? The reason most people don't unless they really have to, is because there are huge amounts of paperwork compared to not registering. I have in the past turned away business to avoid having to register as my trade was seasonal and I knew a couple of months down the line it would drop again!

Joanne
 
The reason they advised him against having a VAT registration number is that scrap gold is exempt so it won't matter if he turns over £73 million there is no VAT to account for, this was done originally to stop the frauds which were rampant, importing gold bullion illegally,selling it with VAT and then defrauding Customs and Excise by either going bankrupt or just dissapearing, they expanded the scheme when they worked out the other tricks the crooks were pulling. If he starts to trade in any other precious metal VAT applies and so a registration might be needed.
 
Hi all,

Chiptech81
Would it be possible ping me a PM with the details of your buyer - if that does not break forum rules. I would be interested in hearing more although would like to get an independent assay, and not rely on the refiners assay. That is just me, your buyer is probably 100% above board.

ten1000trees.

The reason why HMRC are looking at almost all pre-registration requests is simply down to the amount of fraud that has happened in the recent past and even nowadays. The most common type of fraud that has cost HMRC billions is called carousel fraud. Gold, as it is highly valuable and easily transported is an ideal product to use in this type of thing. When they see pre registration and the words "Gold" it is a NO for pre registration straight away. But once you are likely to turn over more the 73K in a calender year you must register for VAT. HMRC will happily give you a VAT number and obviously check everything is kosher.

Ed
 
Eddie try The Bullion Room in Birmingham they pay good rates 0121 515 5999.
For an independent assay try Guardian Labs. They are Birmingham based too 0121 359 8233 speak to Austin, an assay is £10 for gold and their assays are accepted by most buyers in Birmingham, they are friendly and very helpful too. Samples can be sent by post as can your bar if you don't want to travel, the rates here are near the best as we have so many buyers and are mid country so it's easy to get to, competition is the name of the game.

The VAT rules on gold are easy to understand if you are in the business and were easy to exploit if you wanted to and were just after a quick buck. The first scam was melting maples which were VAT free and selling the resultant grain with VAT, this was quickly followed by smuggling gold bullion bars,from Europe where there was no duty, into the UK and selling them with VAT, usually under spot by as much as 5%, all this was done because if you had no intention of ever paying the VAT it was highly profitable. The next move was that the Customs removed fine gold from the VAT scheme so the crooks started to make casting grain or alloyed bars which still had VAT, easy to make if you had a furnace, this caused us many problems as small refiners / bullion dealers as it eroded all the profits as it was still sold under spot we couldn't compete. HM customs then listened to the trade and removed VAT from grain, bars and scrap but left it on semi fabricated products such as wire, sheet and findings which needed more equipment and know how to produce, this killed the scams dead.
The crooks didn't give up and changed direction and any small high value item was then used such as computer chips to run the carousel schemes, some went after platinum and silver as replacements as VAT was still payable on all it's forms. I feel sorry for the Customs as they try to close one loophole another is found and exploited costing all of us in the UK billions and wrecking legitimate businesses in the process, but those making millions don't give a damn and I doubt will ever stop.
The moral here is if your approached by people who want to sell volumes of silver or platinum apparently all above board and with VAT use your common sense and refuse the deal if they don't appear to have any reason to have such material and certainly not in volume and even more so if the price acceptable is below what is easily achieved on the market. I checked one company out that was willing to buy fine gold at very good prices through the Customs and was told it was a legitimate business, I did one deal and refused the rest, it turned out I did the right thing but couldn't get a straight answer out of the Customs just went on gut feelings. The next lesson is if it feels wrong back away unless you want to be pulled into a big expensive mess when it alls comes crashing down and sooner or later it will and I can guarantee that.
I can also bet on the fact that when you phoned about registering for VAT for bulljon trading you were asked If you dealt in platinum.......did you wonder why?
Even as retail jewellers Customs and Excise get very uptight about platinum, take my advice and be careful with whom and what you trade,not all crooks have masks and swag bags.
 
Hello Nickvc , how are tricks?
I hope your well!
nickvc said:
For an independent assay try Guardian Labs. They are Birmingham based too 0121 359 8233 speak to Austin, an assay is £10 for gold .......... Samples can be sent by post.
If I may ask , I see that you said samples , but with these assays , could/would they stamp say a button or a small gold bar with karat and provide certificates?
Or do they use fire assay , so it's not as simple as say , pointing an xrf and pressing print? :roll:
That would sound like a real bargin , and would be just plain cool , 8)
Please forgive my ignorance!
All the best for now , and kind regards ,
Chris :mrgreen:
 
Chris they perform fire assays and supply packets with the assays on, the thing to remember the assay is only as good as the sample so if melting make sure you have a good homogenous bar and take samples top and bottom, they need around 1/2 gram for a gold assay. They do all sorts of testing and use a variety of methods which the pros might understand but it's above me.. :oops:
 
Spiderman I assume you mean if the gold assays at 575 what is the remaining 425. That depends on the origin of the material, it could be copper,silver and zinc if it's karat alloys or copper and nickel if from e scrap.
If you want full assays it going to cost a lot more than £10 but if you phone them I'm sure they can give you a price for that service. They can and do assay for all precious metals and most base metals so it's not a problem I'm sure.
 
Hi again Nickvc , how are tricks today?
I hope your well!
nickvc said:
Chris they perform fire assays and supply packets with the assays on, the thing to remember the assay is only as good as the sample so if melting make sure you have a good homogenous bar and take samples top and bottom, they need around 1/2 gram for a gold assay.
What do you think the score would be say if you were to send them a small 10 gram bar , would they assay the whole thing in one , or would you have send them a smaller sample?
The only reason I ask chief is because my thinking says that If I were to take samples and have them assayed , then came to sell the gold that the sample came from , how would the buyer know that the gold they're buying is the same gold that's inside the assay packet?
Would it be considered good practice (maybe its normal?) to melt the returned assayed sample back with the original gold?
I'm asking this because surely there's a chance of accidentally contaminating the gold whilst remelting it back together , and you might not even know it but your recent assay has just become worthless , and potentialy fraudulent?
Just a case of having clean working practices and using clean torch tips , dishes and molds and it should all be o.k. , or would it be a case of just saving returned samples (having sold the corresponding pieces of gold in the corresponding assay packets) until you had saved enough sample pieces to melt together and have assayed again , and so the circle continues?
I've just noticed that I'm starting to spew questions , sorry chief , I'm just fascinated with the idea of having my own recovered and refined gold (eventualy) proffesionaly assayed , for the average guy off the street like me ( :roll: ) that would be a very cool cherry on top! 8)
Many thanks Nickvc!
All the best for now , and kind regards ,
Chris :mrgreen:
 
Chris most major buyers these days use xrf guns to verify the results anyway it just gives you pre knowledge of what your selling. You don't remelt the bars or how can you prove you took a sample and if you send only the required amount you won't have any to come back. Assaying is cost effective if you have reasonable quantities you don't want to refine or just wish to sell as is, if you refine your metals as per the instructions outlined here on the forum assays aren't necessary as you have gold that should be 999 pure, the pipe almost guarantees purity.
 
nickvc,

Thanks again for your sage advice. I will certainly take what you have said on board. As I start to product more volume I will no doubt come across these type of people. I will check out The Bullion Room and Guardian Labs

In terms of your question on Platinum. When I spoke to HMRC I was very, very clear with the people I was speaking too. I stressed it was only gold I was dealing with. I also sent them my business model and a whole host of documents. They did not mention Platinum, perhaps that was because of the amount of document I sent to them. For a government agency, the people seemed very switched on and appeared to know the Gold market pretty well in the UK.

Eddie
 
Eddie they learnt the hard way as my stories illustrate, the Customs were outwitted at every turn and only by removing gold from the equation did they win, not entirely their fault to be fair the government were not to keen on removing duty on what was viewed as a luxury even though the Cusroms knew it was the only way to combat the fraud. I suppose it just proves that clever fraudsters know how to twist rules for their own benefit, reminds me of bankers :lol:
 
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