In short: Not always. Investment gold is exempt from VAT, and exempt sales do not count towards the £90,000 registration threshold, so a business turning over £100,000 can still be below it.
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I was on a call recently with a client who runs a gold bullion and jewellery business, and I was talking him through whether he actually needs to register for VAT.
Here's the bit that trips people up: not all your sales are subject to VAT.
Is gold bullion exempt from VAT?
In my client's case, investment-grade gold bullion is an exempt supply for VAT purposes, but jewellery sales are standard-rated at 20%.
HMRC sets out the rules on gold in VAT Notice 701/21, and its notice on investment gold coins says an investment gold coin that meets its criteria is exempt from VAT. Jewellery is not investment gold, so it is charged at the standard rate.
What counts towards the £90,000 VAT threshold?
HMRC's guidance on when to register for VAT says you must register if your total taxable turnover for the last 12 months goes over £90,000. It defines taxable turnover as the total value of everything you sell that is not VAT exempt or out of scope. Zero-rated sales count towards it, so the sales that come out are the exempt and out of scope ones.
So say your total turnover is £100k, but £80k of that is exempt sales and £20k is standard-rated sales.
You're actually below the £90k threshold and don't need to register, even though total turnover is well over it.
What if you register when you didn't need to?
Get this wrong the other way, and you could end up registering unnecessarily and charging VAT to clients when you never needed to in the first place.
If your business has a mix of exempt and standard-rated supplies, it's always worth checking exactly what counts towards the threshold before assuming your total turnover is the number that matters.
The same point in more detail is in do exempt sales count towards the VAT threshold. If you have gone over the threshold for a one-off reason, see do you have to register for VAT if you go over £90,000. Gold and Capital Gains Tax is covered in do you pay Capital Gains Tax on gold in the UK.
Whether a sale is exempt depends on exactly what you sell and how, so this is general information rather than advice on your position. If you are unsure whether you need to register, talk to us.
Common questions
Yes, where it meets HMRC's conditions. HMRC's notice on investment gold coins says a coin that meets its criteria is exempt from VAT, and the wider rules on gold are in VAT Notice 701/21. See [gold acquisitions, imports, investments and VAT (Notice 701/21)](https://www.gov.uk/guidance/gold-acquisitions-imports-investments-and-vat-notice-70121).
No. HMRC defines taxable turnover as the total value of everything you sell that is not VAT exempt or out of scope. Zero-rated sales do count. See [when to register for VAT](https://www.gov.uk/vat-registration/when-to-register).
You must register if your total taxable turnover for the last 12 months goes over £90,000. See [when to register for VAT](https://www.gov.uk/vat-registration/when-to-register).
Related reading
Simon Jacobs is a Chartered Tax Adviser (CTA · ACA) and PwC trained, founder of SRJ International. He advises UK business owners on tax, profit extraction and exit. Read his full profile →
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