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Legislation
Legislation
Article 346 of Directive 2006/112/EC (the PVD) exempts certain supplies of investment gold and is as follows:
Member States shall exempt from VAT the supply, the intra-Community acquisition and the importation of investment gold, including investment gold represented by certificates for allocated or unallocated gold or traded on gold accounts and including, in particular, gold loans and swaps, involving a right of ownership or claim in respect of investment gold, as well as transactions concerning investment gold involving futures and forward contracts leading to a transfer of right of ownership or claim in respect of investment gold.”
The exemption for investment gold is implemented in the United Kingdom by section 31 and Group 15 of Schedule 9 VATA. Group 15 is headed “Investment gold” and exempts (so far as material):
“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
….”
As regards these supplies, regulation 31A(1) of the 1995 Regulations (“regulation 31A(1)”) provides for invoice and record keeping obligations where:
“31A(1) This regulation applies where a person—
…
(b) makes a supply of a description falling within item 2 of Group 15 of Schedule 9 to the Act, which subsequently results in the transfer of the possession of the investment gold”.
Where regulation 31A(1) applies, the person must keep and maintain a record of the supply containing such details as may be specified in a notice published by HMRC for the purposes of the regulation.
A penalty under section 69A VATA 1994 arises where a person fails to comply with requirements of regulations made under section 13(5)(a) or (b) of the Finance Act 1999 “for specified persons to keep specified records in relation to specified transactions concerning gold” and “for specified persons to give specified information to the Commissioners about specified transactions concerning gold.” Regulations made pursuant to section 13(5) are in the VAT Regulations.
Specifically, regulation 31A(2) of the VAT Regulations imposes invoicing, record keeping and notification requirements on taxable persons making supplies of investment gold under Items 1 and 2 of Group 15 of Schedule 9 VATA 1994. Regulation 31A(2) provides as follows:
“…
(b) keep and maintain a record of the supply containing such details as may be specified in a notice published by the Commissioners for the purposes of this regulation;
…
(d) keep and maintain a record of the recipient of the supply containing such particulars pertaining to the recipient as may be specified in a notice published by the Commissioners for the purposes of this regulation;
(e) keep and maintain such other records and documents as may be specified in a notice published by the Commissioners for the purposes of this regulation to allow the proper identification of each recipient of the supply;”