£5000 Limit to buy gold without providing passport?

[Arisian]

So I put in an order to a very well known dealer on Friday which was over £5000. Today they have come back and asked to see my passport and Driving license and a household bill.

Now I understand it's law that if you are buying gold over a value of £5000 then it's a requirement - EXCEPT in certain circumstances - one of these is selling over the internet/mail order

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(VAT Notice 701/21) section 7.4

7.4 Internet and mail order sales

This section has force of law.

If you sell investment gold over the internet or by mail order and you fulfil the conditions at (a) or (b) below, you may, instead of keeping the customer record set out at paragraph 7.1(b), keep and maintain the following record:

(a) if your supply is paid for by credit card and the delivery address is also the card holder’s address, you must record the name of your customer, the credit card issuer and the card number; or

(b) if your supply is paid for by cheque, you must record the name of your customer, the name of the bank and the account number of your customer.

You must also keep proof of despatch of the investment gold to your customer’s address.

=================================================

It seems to me that it's not necessary to provide all the details being requested by the dealer. what are other people's experience of this? When I've bought Gold over £5000 previously (Royal Mint) there wasn't a murmur. I guess in the scale of things it's not necessarily a biggie. But being aware of Identity Fraud I try and keep my personal information to myself as much as possible - it's going to sit on their hard drives for the next 7 years, who knows who has access to it.

Am I over reacting?

Edited July 10, 2023 by Arisian

[Petra]

It actually says ‘you may’ on the top line, meaning that they don’t have to do sections a and b? Try looking somewhere else?

Edited July 10, 2023 by Petra
Spell

[Arisian]

Just now, Petra said:

It actually says ‘you may’ on the top line, meaning that they don’t have to do sections an and b? Try looking somewhere else?

Yes absolutely - so it's their choice to do it.

[Petra]

They have just got in to the habit of doing it this way and aren’t bothered as it works

[Bratnia]

You cite VAT law, additionally there's anti-laundering requirements https://www.gov.uk/guidance/money-laundering-regulations-your-responsibilities#record-keeping-requirements

Quote

Customer due diligence means taking steps to identify your customers and checking they are who they say they are. In practice this means obtaining a customer’s:

name
photograph on an official document which confirms their identity
residential address and date of birth
The best way to do this is to ask for a government issued document like a passport, along with utility bills, bank statements and other official documents.

and

Quote

In some situations you must carry out ‘enhanced due diligence’. These situations are:

when the customer is not physically present when you carry out identification checks

I imagine that RM get away with a light touch in being much less inclined to become involved in laundering. For other dealers there's a greater risk of being investigated and according they strive to be above-board.

Edited July 10, 2023 by Bratnia

[MBTPSilver]

I think this has been discussed on other threads and Lawrence Chard has explained quite well, but yeah the limit is kind of meaningless. Keeping accurate records from the opening order is the best way for business to protect themselves if they're audited, or if a fraudulent order does slip through and they are investigated. If you're not checking legally recognised documents from the start then people could easily just bounce around all the dealers buying just under the threshold to never supply documents, it would end up being a simple money laundering trick.

[n1k0s]

Does anyone know what is the legal requirement if you shop in person at the shop?

Is there an obligation to provide an ID? 

Does someone have a link to the EU legilslation?

thanks

[Thelonerangershorse]

There's also the need to provide ID if you buy more than £10k from one dealer in any year,

 

[Allgoldcoins]

10 hours ago, Thelonerangershorse said:

There's also the need to provide ID if you buy more than £10k from one dealer in any year,

 

This is correct, we ask customers to provide ID and proof of address if they order over £10,000 worth of bullion coins. The 5k limit quoted above is a recommendation only, but I understand the limit to be 10k whether this is in a single or witin multiple purchases. We keep these records as we are duty bound by the money laundering, fraud and terrorism regulations

We do not ask for ID for items above 10k if they are classed as collectable coins, Eg if you purchase a rare coin for say £12000.

No one should be offended if they are asked to provide proof of address and ID.

[Bratnia]

Modern day UK law/regulations are such that ... everyone/anyone can be deemed guilty until they might otherwise prove themselves otherwise. For example some might fall foul of https://www.gov.uk/guidance/money-laundering-regulations-high-value-dealer-registration where if you trade a modest/meaningful amount of gold/silver you could be deemed to be a trader that hadn't registered as required by law nor paid the associated levies/fees. Norman Wisdom the comedian was found guilty of being a trader despite having just made a single silver trade.

If not that, there are likely many other rules/laws that could go against you and where individuals with perhaps a single legal representative are up against HMRC/state with their unlimited resources.

In effect the laws are such that they incite illegalities. Those that might otherwise have striven to be compliant/above-board are driven to being more inclined to not bother. Hence the common gold "boating accident" sarcasm/joke. Broad distrust in the government such that the common suggestion is to declare that you used to have it but lost it in a boating accident if the government comes knocking. That however means that you have to later launder it back into regular currency. A treat me as guilty and I'll act illegally stance, better for all would be if the rules were simpler/easier to comply with such that individuals might be more inclined to respect and act within the laws.

Also, given the regularity of data breaches or loss of records even by government agents having records of your photo, name, address amount of gold/whatever purchased certainly doesn't best serve you or your families best interests. I do wonder about using a proxy for purchasing/sales. They're supposed to report at the time of purchase whether they're buying for someone else - which leads to passport/personal data of the actual recipient still having to be handed over, but I guess they could instead claim it was a personal purchase for them (the proxy) bought using a peer to peer personal cash loan, that a few days later they opted to close that loan and settled it in gold. Looks to me that @BackyardBullionprovides a escrow service where buyers/sellers can trade between themselves with confidence (validation that the item being sold is what it is described as, and that the buyers money is also validated; Or for selling quantities of gold/silver (and presumably buying)) and where, given his recent problems with banks stopping payments to the Royal Mint, I guess he might be prepared to accept crypto type transfers/payments.

[ady]

Does this not prove that gold and silver are money and fiat money is a means of control. Look at the hoard found turn up, "boating accidents" have been happening for a long time. With precious metals you at least definable weight and grade which the authorities can define.

I have had problems where identity is required as now have an expired passport, and a old pink driving licence. This has given companies problems as I have no obligation to have a photo ID and that is what is being pushed for by stealth rather than full out legislation.

A bit off topic but if you are a high up or want to launder money yourself you would be best using the art market. Another good way to pay a nice sum to politician or the like is a book deal, who really reads all these memoires?

[Bratnia]

14 hours ago, ady said:

Does this not prove that gold and silver are money and fiat money is a means of control. Look at the hoard found turn up, "boating accidents" have been happening for a long time. With precious metals you at least definable weight and grade which the authorities can define.

I have had problems where identity is required as now have an expired passport, and a old pink driving licence. This has given companies problems as I have no obligation to have a photo ID and that is what is being pushed for by stealth rather than full out legislation.

A bit off topic but if you are a high up or want to launder money yourself you would be best using the art market. Another good way to pay a nice sum to politician or the like is a book deal, who really reads all these memoires?

Art, land and gold ... a fundamental asset allocation for generational wealth. Dimson, Spaenjers and Chambers evidenced John Maynard Keynes' lifetime art collection value and observed similar long term total returns to that of stocks. Stocks are easier than art for many ... so stocks, own a home (land) and hold some gold. Nothing knew, the ancient Talmud advocated that asset allocation millennia ago ... has stood the test of time.