VGOLD1500 - The special accounting scheme

This scheme applies to standard rated supplies of gold only i.e. a supply of non investment gold or a supply of investment gold where the supplier has opted to tax.

In order to prevent missing trader fraud, the UK introduced a special accounting and payment scheme in 1993 for gold transactions between taxable persons or persons liable to be registered. Because gold is a high value commodity it was regularly used by fraudsters who charged VAT on the supply of gold to their customers and disappeared without paying it to HM Revenue and Customs. Under the scheme, the responsibility for accounting for the output tax to HMRC is passed to the purchaser who may also recover the tax as input tax, subject to the normal rules.