Value Added Tax Act 1994 section 55

Customers to account for tax on supplies of gold etc.

Section 55 establishes a reverse charge mechanism for supplies of gold, requiring the customer rather than the supplier to account for and pay VAT on certain gold transactions between taxable persons.

• When gold is supplied as a taxable (but not zero-rated) supply, it counts as a taxable supply of both the supplier and the recipient for VAT registration purposes, and if received for business use, it is treated as a supply made in the course of the recipient's business.
• Where both the supplier and recipient are VAT-registered taxable persons and the gold is supplied for business purposes, the recipient (not the supplier) must account for and pay the VAT — this is known as the reverse charge.
• A "supply of gold" covers fine gold, gold grain or gold coins of any purity, goods containing gold where the price broadly reflects only the gold's market value, and services that process someone else's goods into fine gold, gold grain or gold coins.
• The Treasury has the power to extend this reverse charge mechanism by order to other supplies involving precious or semi-precious metals or stones.