Buying scrap gold from the public in England and Wales needs no licence of its own: gold is excluded from the Scrap Metal Dealers Act 2013, and lending against gold is what needs Financial Conduct Authority permission, not buying it. What a gold buyer does need is HMRC registration as a High Value Dealer before accepting or making cash payments of £10,000 or more (a sterling threshold since 30 June 2026), the anti-money-laundering controls that come with it, a trade-approved Class II scale, a way to test fineness, a refiner account, insurance, and a VAT position worked out before the first lot goes to the refiner. In Scotland, add a second-hand dealer licence from the local council.

This article is the set-up list. The price arithmetic is in Scrap gold price per gram explained; the software question is in Gold buying software: what a gold desk needs.

The checklist, in order

Step What it is Who it comes from Cost, as of August 2026
Decide whether you will lend Pawnbroking is regulated consumer credit and needs FCA authorisation. Outright buying does not. Financial Conduct Authority FCA fees only if you lend
Register as a High Value Dealer if you will handle cash of £10,000+ Money Laundering Regulations 2017, regulation 14, as amended in 2026 HMRC £300 application plus £400 per premises, then £400 per premises a year; £40 per person for the approval check
Scotland only: second-hand dealer licence Civic Government (Scotland) Act 1982, section 24 Your local council Set locally
Trade-approved Class II scale, verified for your postcode Non-automatic Weighing Instruments Regulations 2016 Scale supplier; verification by an approved body; Trading Standards enforce Not published here - varies by model
Testing kit Acid and touchstone at minimum; electronic or XRF as volume grows Equipment suppliers From tens of pounds (acid) to five figures (XRF)
Refiner account Where the lot goes and what you are paid for it UK refiners and bullion dealers Terms per account, not published
Insurance Stock, cash, goods in transit, public liability Specialist jewellery insurers and brokers Quoted per risk
VAT registration and the gold scheme £90,000 taxable turnover threshold; reverse charge on scrap sold to VAT-registered buyers HMRC, VAT Notice 701/21 No fee
Investment gold notification, if you will sell coin or bars Notify within 28 days of the first exempt supply over £5,000 HMRC, VAT Notice 701/21 section 3 No fee; 17.5% penalty for a missing register
Records Every buy: seller ID, item, weight, fineness, price, spot, photo You The software or the book

Do I need a licence to buy gold?

In England and Wales, no. The Scrap Metal Dealers Act 2013 defines scrap metal to exclude "gold, silver, and any alloy of which 2 per cent or more by weight is attributable to gold or silver", so the council scrap-metal licence does not apply to a jewellery scrap counter. There is no separate precious-metal buyer's licence.

In Scotland, the Civic Government (Scotland) Act 1982, section 24, requires a second-hand dealer licence from the local authority, and councils' standard conditions for it name jewellery and articles wholly or mainly of gold, silver or platinum. Typical conditions include keeping a record of everything bought and sold for at least two years, not buying from anyone who appears under 16, and not keeping a smelting pot on the premises. Pawnbrokers are exempt from that licence under section 24(3), because they are regulated elsewhere.

Lending is the line. The moment you hand over money and the customer can come back for the item, that is a pawn, regulated under the Consumer Credit Act 1974 (a pawn is redeemable for at least six months under section 116) and supervised by the FCA. The FCA's pawnbroking sector review sets out what it expects. A "buy-back" arrangement is a commercial fudge of the same thing and has its own FCA history. If you want to buy, buy; do not drift into lending without authorisation.

When do I have to register with HMRC as a High Value Dealer?

If your business accepts or makes cash payments of £10,000 or more for goods - in a single payment or in linked payments that add up to it - you must register with HMRC as a High Value Dealer before you take or make that payment. Cash means notes, coins and travellers' cheques, including cash paid into your bank account by the customer. Card and bank transfer payments do not count.

The threshold was €10,000 until 30 June 2026, when the Money Laundering and Terrorist Financing (Amendment) Regulations 2026 substituted "£10,000" for "10,000 euros" in regulation 14 of the 2017 Regulations. As of 19 August 2026 HMRC's High Value Dealer registration guidance still showed the euro figure; the legislation is the authority.

Note the direction. A gold buyer mostly pays cash rather than receiving it, and regulation 14 catches a business that makes cash payments of £10,000 or more for goods as well as one that accepts them. Paying a seller £10,000 in notes for a bag of sovereigns triggers registration exactly as a £10,000 cash sale does.

The fees, per HMRC's registration fees page (fee changes from 1 December 2025): a £300 non-refundable application fee, £400 for each premises, £400 per premises on the annual declaration, and a £40 approval check for each relevant person. Businesses with turnover below £5,000 get a £500 refund once the application or declaration is accepted.

Many gold buyers avoid the regime by simply not dealing in cash at or above £10,000 - paying by bank transfer above a house limit. That is legitimate. It has to be a real policy with a running per-customer total, because linked payments count. The detail is in Do I need to register as a High Value Dealer?.

What anti-money-laundering controls do I need?

If you are a registered High Value Dealer, the Money Laundering Regulations 2017 apply in full: a written risk assessment, policies and procedures, customer due diligence on the high-value cash transactions (identity verified against documents, with enhanced checks where the risk is higher), a nominated officer to receive internal reports and make suspicious activity reports to the National Crime Agency, staff training, and records kept for five years.

If you are not a High Value Dealer, the Regulations do not apply to you. The Proceeds of Crime Act 2002 still does: buying stolen jewellery is handling stolen goods whatever your registration status. Take and keep photographic ID and proof of address from every seller, photograph every item, record the hallmark and weight, and hold anything that feels wrong. Police will ask for exactly those records when a piece turns out to be from a burglary, and a buyer with no records is the buyer they come back to.

How does VAT work for a gold buyer?

Three rules, all in VAT Notice 701/21.

Buying from the public: no VAT. A private seller is not VAT-registered and cannot charge it. There is nothing to reclaim.

Selling scrap to a refiner: reverse charge. If you are VAT-registered and you sell gold scrap to another VAT-registered business at a price that does not exceed the open market value of the gold it contains, you must not charge VAT. The buyer accounts for it. Your invoice must carry the wording "£...... output tax on this supply of gold to be accounted for to HM Revenue and Customs by the buyer", show the weight, purity, number of items and the fix price used, and be kept for six years. This is compulsory. You cannot use the margin scheme for gold sold at metal value - VAT Notice 718 paragraph 2.8 bars precious metals from it. The mechanics are in Do I charge VAT on scrap gold?.

Registration. The VAT registration threshold is £90,000 of taxable turnover in any 12 months, per GOV.UK. A gold counter reaches £90,000 of refiner sales quickly - at 2026 prices that is a little over two kilos of 9ct - and Notice 701/21 frames the gold scheme as applying where both parties are VAT-registered "or are persons liable to be registered". Work out your position with your accountant before the first refiner invoice, not after the twelfth.

Investment gold. If you will also buy and sell sovereigns, Britannias, Krugerrands or bars of 995 fineness or better, that is exempt investment gold, with its own notification (within 28 days of your first exempt supply over £5,000, or supplies to one customer over £10,000 in 12 months), a register of transactions with verified customer identity, and a penalty normally 17.5% of the value of the transactions if the register is missing. See Selling investment gold: when do I have to tell HMRC?.

What scales and testing kit do I need?

Scales. Scrap is priced by weight alone, so the scale is a legal instrument. Under the Non-automatic Weighing Instruments Regulations 2016, a scale used for trade in gold, silver, platinum, precious stones or pearls must be a Class II non-automatic weighing instrument, trade-approved and verified. The National Association of Jewellers' code of practice on weighing scales, issued as assured advice under its primary authority partnership with Trading Standards, lists the markings to look for - the "M" metrology mark, CE, UKCA or UKNI marking, year of manufacture, and a verification sticker from an approved body - and warns that Class II scales are calibrated for a geographic location, often by postcode, so moving one to another site without re-verification is a common failure. Kitchen and postal scales are not lawful for this. Budget for calibrated test weights and keep the verification certificate where an inspector can see it.

Testing. An acid kit and touchstone (nitric and aqua regia test acids graded for 9, 14, 18 and 22ct) is the minimum and costs tens of pounds. Electronic conductivity testers are faster and cost hundreds. X-ray fluorescence analysers give an alloy reading in seconds and are what established desks use; they cost thousands to tens of thousands of pounds depending on handheld or benchtop and on the detector. All of them read the surface, so anything heavy and unhallmarked gets cut or drilled. Prices vary enough by model and supplier that we are not quoting them here; our equipment comparison, XRF gold tester vs acid test, goes through what each misses.

A loupe, a magnet (gold is not magnetic; the steel spring bar in a clasp is), and a hallmark reference complete the kit.

Where does the gold go, and what are the margins?

You sell the accumulated lot to a refiner or a bullion dealer that buys scrap. Refiners assay the lot, settle against the LBMA price on an agreed day, and return a percentage of the fine gold content less a treatment charge; terms are per account and depend on volume and grade. Most new buyers start by selling to a larger trade buyer rather than a refiner, at a slightly lower return, until their volumes justify a refiner account.

The margin is the gap between what you pay at the counter and what the refiner returns, less price movement between the two dates, testing misses, and stones and dirt in the weight. Published UK buyer rates on 19 August 2026 ran from around 70% of melt to 89.4% at the most transparent postal specialist, against a refiner return somewhere in the mid-to-high 90s. A buyer paying 85% and settling at 96% has eleven points to cover a fortnight of metal risk, premises, insurance, compliance and profit; a buyer paying 70% has twenty-six points and a reputation problem. The faster the lot is settled, the less price risk you carry and the closer to melt you can pay.

Price every buy against a spot figure written down at the time; when the refiner settles two months later, the only way to know whether the desk made money is fine-gold price paid versus fine-gold price received. Our scrap gold calculator does the per-carat arithmetic from a spot price and a buy rate.

Insurance and premises

Stock, cash, goods in transit to the refiner and the public walking in all need covering, and an ordinary shop policy will not do it. Specialist jewellers' block policies exist; insurers will ask about the safe, the alarm, cash limits and how the lot travels. Get the quote before signing the lease, because the premises conditions an insurer imposes can cost more than the premium.

What records do I keep?

For every purchase: date, seller's name, address and ID, each item with hallmark, weight and fineness, price paid and how, the spot price you priced against and when, and a photograph. For every refiner sale: the invoice with the reverse charge wording, weight, purity, item count and fix price. VAT records are kept six years (Notice 701/21), AML records five; six covers both. A paper book does this for a small desk; the five ways people currently run a gold desk covers when it stops working.

What we could not verify

  • HMRC's High Value Dealer guidance page still showed the €10,000 figure on 19 August 2026 although the 2026 Regulations substituted £10,000 from 30 June 2026. We have relied on the legislation. Check the guidance page for its update.
  • Refiner returns. No UK refiner publishes a rate card. The mid-to-high 90s percent figure is widely repeated in the trade; confirm your own terms in writing.
  • Equipment prices. Scale, tester and XRF prices vary by model, supplier and verification service; we have deliberately not quoted figures.
  • Local second-hand dealer conditions in Scotland differ by council. Read your own council's conditions.

Sources

This is general information, not legal, tax or regulatory advice. Thresholds, fees and guidance change, and the consequences of getting registration or VAT wrong fall on you. Confirm your position with your accountant, with HMRC and, if you intend to lend, with the FCA before you open.

Milleso records each counter buy with the seller's AML file, weight, fineness, the spot you priced against and the VAT treatment decided at intake, keeps a running cash total against the £10,000 High Value Dealer threshold, and produces the reverse charge invoice when the lot goes to the refiner - so the records above exist because you did the transaction, not because you remembered to write them down afterwards.