The Value Added Tax (Terminal Markets) Order 1999

Explanatory Note

(This note is not part of the Order)

This Order, which comes into force on 1st January 2000, further amends the Value Added Tax (Terminal Markets) Order 1973 (S.I. 1973/173) (“the principal Order”) and extends its provisions in respect of certain supplies involving “investment gold” as defined in a new article 2(5) of the principal Order. This Order affects only certain supplies involving members of the London Bullion Market Association (LBMA).

The Order implements the special procedure for transactions on a regulated bullion market permitted by Council Directive 98/80/EC 12th October 1998—Special scheme for investment gold—amending Council Directive 77/388/EEC. The amending Directive enacts the existing procedure formerly permitted by derogation under Article 27 of Council Directive 77/388/EEC.

Article 3 replaces out-dated references in the principal Order to the London Gold Market and the London Silver Market with a new reference to “the London Bullion Market”.

Article 4 defines members of the London Bullion Market as members of the LBMA.

Article 5 defines the term “the Act” as meaning the Value Added Tax Act 1994 and defines “investment gold” as having the same meaning as in Group 15 of Schedule 9 to the Act.

Article 6 removes supplies involving investment gold from the scope of article 3(1)(a) of the principal Order so that they are no longer zero-rated under that article.

Article 7 amends article 3(1)(c) in order to maintain the current zero-rating for supplies of services made by members of the LBMA when they act as agents in respect of supplies of investment gold.

Article 8 adds to the principal Order new articles 4-7. New article 4 zero rates supplies involving investment gold between members of the LBMA. New article 5 applies section 55(1)-(4) of the Act (customers to account for tax on supplies of gold) to certain supplies involving investment gold between LBMA members and other taxable persons who are not LBMA members. New article 6 removes the requirement for a person who is not a member of the Market, who has become liable to register for VAT solely because of his dealings in investment gold with members from having to notify his liability to be registered. New article 7 transfers VAT recording and payment obligations from the non-member to the member.