As an educated investor, you may have wondered why UK bullion dealers ask for identification from customers. In this guide, we will explore the reasons behind this requirement, the compliance and regulations that govern this practice, and the types of identification required. It is important to note that these documentation needs ars for compliance purposes and the bullion dealer is not obliged to submit them to any government agencies, unless there is warrant for it. The main reasons for collecting ID documents from customers are as follows,
- Know Your Customer (KYC)
- Anti-Money Laundering (AML)
- VAT Exemption
Know Your Customer (KYC)
One of the primary reasons UK bullion dealers require ID from customers is to comply with Know Your Customer (KYC) regulations. KYC is a mandatory process designed to verify the identity of customers and ensure they are not involved in money laundering or other illegal activities. UK bullion dealers are required to collect specific information such as name, address, date of birth, and occupation, which will be cross-checked against government databases.
Anti-Money Laundering (AML)
Another reason why UK bullion dealers require ID from customers is to comply with Anti-Money Laundering (AML) regulations. AML regulations are designed to prevent the illegal movement of money through financial institutions. Bullion dealers must comply with these regulations by verifying the identity of their customers and monitoring their transactions for any suspicious activity.
VAT Exemption
UK bullion dealers also require ID from customers to ensure compliance with VAT exemption regulations. HMRC VAT701/21 requires bullion dealers to keep a record of each customer’s name and address and the quantity and type of bullion sold. The ID collected from customers is essential to prove the bullion is being sold to an individual or entity that qualifies for VAT exemption.
Types of Identification Required
When buying gold bullion in the UK, customers are required to provide one or more of the following forms of identification:
- A valid passport
- A valid UK driver’s license
- A national ID card issued by a European Union member state
- A government-issued identity card from another country
- A recent utility bill or bank statement that confirms the customer’s address
When buying Gold Bullion for a Company If a company is buying gold bullion, it is also required to provide identification to comply with KYC and AML regulations. In addition to providing the company’s registration documents, a company representative must provide identification, such as a passport or driver’s license.
In summary, UK bullion dealers require identification from customers to comply with regulations and ensure that they are not facilitating money laundering or other illegal activities. Customers are required to provide identification that verifies their identity and address, and companies must provide additional registration documents. By understanding these requirements, you can be confident that UK bullion dealers are taking the necessary steps to ensure compliance and protect the integrity of the gold bullion market.
