Watch dealing in the UK: licensing, money laundering rules, and VAT

Summary

The UK has no single licence for dealing in second-hand watches. Licensing is a patchwork: Scotland licenses second-hand dealers where a council has chosen to, England and Wales have registration duties only in areas covered by a local Act, and no regime was found in Northern Ireland. What reaches every dealer is national: the money laundering rules for anyone taking £10,000 or more in cash, VAT and the margin scheme for second-hand goods, consumer rights on what you sell to the public, and hallmarking whenever you describe a watch as gold, silver or platinum.

Licensing in Scotland

The Civic Government (Scotland) Act 1982 requires a second-hand dealer's licence for carrying on business as a dealer in second-hand goods "of any description" (s.24). But it is an optional provision: it has effect in a council's area only if the council has passed a resolution, and that resolution must name the classes of goods it covers (s.9). So the answer is council by council.

Some councils name watches. Falkirk's resolution covers "personal effects including clothing, watches, jewellery". Edinburgh's resolution, passed in 1983, lists second-hand jewellery dealers and dealers in second-hand general goods without naming watches, and the council is reviewing it this autumn. GOV.UK says you will "usually" need to register in Scotland if you trade clocks and watches or jewellery.

Where a licence applies:

• A hold on stock. You may not dispose of anything you have bought until 48 hours after you acquired it, not counting Saturdays and Sundays (s.25). Items bought at a public auction and never brought to your premises are excepted.
• Records and ID. Councils set these in the licence conditions (s.24(4)). Edinburgh's conditions, for example, require records kept for at least two years and two forms of identification from each seller, one of them photographic where available.
• Duration and penalties. A licence lasts three years or a shorter period the council sets. Trading without a required licence is an offence carrying a fine of up to level 4 on the standard scale, which is £2,500.

The Act exempts pawnbrokers, charities, wholesale dealers buying only from licensed dealers, and dealing in second-hand goods incidentally to another business, such as a retailer's occasional trade-ins (s.24(3)).

Licensing in England, Wales and Northern Ireland

England and Wales have no national licence for second-hand dealers. Instead, some areas have a local Act that requires dealers to register with the council, usually free, and to record each purchase. Two examples:

• Greater Manchester. The Greater Manchester Act 1981 s.54 requires anyone dealing in second-hand goods to register with their borough. Councils describe the registration as free and valid for three years, with a register of transactions kept for at least 12 months.
• Newcastle upon Tyne. The City of Newcastle upon Tyne Act 2000 s.20 requires registration (valid for 3 years, no fee) and a record of each acquisition, kept for one year: the date, the description of the item and the name and address of the seller.

There is no central list of which areas have such an Act, so ask your council's licensing or trading standards team before you start.

Northern Ireland: no second-hand dealer licensing or registration was found in Northern Ireland legislation. That is the result of a search, not a confirmed absence.

Wherever you trade, buying a watch you know or believe to be stolen is the offence of handling stolen goods (Theft Act 1968 s.22 in England and Wales).

Money laundering: the £10,000 cash rule

Under the Money Laundering Regulations 2017, you are a high value dealer if you trade in goods and make or receive £10,000 or more in cash for a transaction, whether in one payment or several that appear to be linked (reg 14). The figure was changed from 10,000 euros to £10,000 by amending regulations in force from 30 June 2026. HMRC's own guidance page still shows the old euro figure; the regulation is what applies.

If that describes you:

• Register first. You must be on HMRC's register before you act as a high value dealer (reg 56). HMRC's fees are a £300 application fee, £400 for each premises, £40 for each person tested, and a £400 annual fee for each premises.
• Check the customer. On a cash transaction of £10,000 or more you must identify and verify the customer (reg 27).
• Keep the records for five years (reg 40).

HMRC's supervision handbook lists "Jewellery & watches" as a high value dealer sub-sector and says high value watches are likely used by criminals "as an alternative payment to cash". If you are only ever paid large amounts by card or cheque, HMRC's guidance says you don't need to register. Cash paid into your bank account for you still counts as cash.

VAT and the margin scheme

You must register for VAT if your taxable turnover for the last 12 months goes over £90,000, or you expect it to in the next 30 days, and you have 30 days from the end of the month you went over to register. The standard rate is 20%.

For second-hand goods, the margin scheme lets you pay VAT on the difference between what you paid and what you sold for, rather than the full selling price: one-sixth of the margin, or 16.67%. It can't be used on anything you were charged VAT on when you bought it, and it excludes precious metals and precious stones; whether a finished precious-metal watch counts as second-hand goods is in the questions below. You don't register for the scheme, but you must keep its records: a stockbook tracking each watch individually, and purchase and sales invoices that meet the scheme's rules, kept for 6 years. Get them wrong and VAT is due on the full selling price.

The simpler global accounting scheme is for bulk, low-value goods and can't be used for any item bought for over £500, which rules it out for most watches.

Selling to consumers

When you sell as a trader to a consumer at a distance (online, by phone, by post), the buyer can cancel without giving a reason until 14 days after the watch reaches them. If you don't give the required cancellation information, that period can run on for up to 12 months. Contracts concluded at a public auction are excluded.

The Consumer Rights Act 2015 requires goods a trader sells to be of satisfactory quality and as described, and a contract term can't exclude that (s.31). "Sold as seen" doesn't remove those rights on a sale to a consumer. The short-term right to reject faulty goods lasts 30 days. Second-hand goods sold at a public auction the public can attend in person are largely outside these rules.

None of this applies to a private individual selling their own watch. It applies once you are acting as a trader.

Importing and exporting

Under the UK Global Tariff, wristwatches fall under heading 9101 (cases of precious metal) or 9102 (other cases). The Trade Tariff shows third-country customs duty of £0.20 per item on the codes checked, including automatic and quartz wristwatches, plus import VAT at the standard rate. Preferential rates apply to goods of qualifying origin from countries such as Switzerland and Japan. The tariff also flags a CITES control on these codes, which can matter for straps made from protected species such as crocodile.

If you are VAT-registered, postponed VAT accounting lets you declare and recover import VAT on the same VAT return instead of paying it at the border.

Watches made more than 50 years before export count as objects of cultural interest, which need an export licence to leave the UK. Arts Council England runs the licensing, including an Open General Export Licence, so check whether a watch is covered by it before you ship. Moving one from Great Britain to Northern Ireland needs no licence.

Hallmarking

It is an offence, in the course of a business, to describe an unhallmarked article as gold, silver, platinum or palladium, or to supply one so described (Hallmarking Act 1973 s.1). The Act's list of exempt articles does not include watch cases, and its small-weight exemptions don't apply to articles that contain other materials, as every watch does. "Gold plated" and "rolled gold" are permitted descriptions, as are descriptions of colour alone. Any dealer in precious-metal articles must display the British Hallmarking Council's notice where customers are admitted (s.11).

Business registration

You can start trading as a sole trader straight away, but you must register for Self Assessment once you earn more than £1,000 in a tax year. A limited company is registered with Companies House for £100 online.

If you sell through online marketplaces, they report sellers to HMRC unless you make fewer than 30 sales of goods in a calendar year and receive less than 2,000 euros for them.