View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
  2. Company news
January 21, 2014updated 04 Apr 2017 4:09pm

UK tax authority reviews current tax treatment of Bitcoin

Her Majesty’s Revenue and Customs (HMRC), the UK’s tax authority, has announced that it is seeking alternatives to the current tax treatment of Bitcoin

By Angelo Boccato

Her Majesty’s Revenue and Customs (HMRC), the UK’s tax authority, has announced that it is seeking alternatives to the current tax treatment of Bitcoin.

 

Bitcoin purchases in the UK are currently carry a 20% value added tax (VAT) and one option under review is the reclassifying Bitcoin as private money, with a consequent VAT limitation on transactions.

 

This was the option chosen by Germany’s central bank, the Deutsche Bundesbank.

 

An HRMC spokesman said that they had held "constructive meetings with stakeholders" over VAT on the currency.

 

HRMC is driving the review as a response to the growing concern and search for regulation on the currency expressed by various central banks, such as the Chinese, Dutch and Norwegian ones.

 

In 2013, Bitcoin’s world stock has risen from $150m to $10bn.

 

Bill Dodwell, head of tax policy at Deloitte, said: "Many large businesses will be put off from accepting virtual currencies such as Bitcoin given the fringe nature of the industry and lack of transparency.

 

"That’s not to say that a cryptocurrency will not succeed in the future.

 

"HRMC clarifying its tax treatment will give more certainty to participants in the market and over the transactions taking place.

"This may boost confidence in cryptocurrencies and lead to wider adoption."

 

 

Related articles:

Silk Road seized Bitcoins to be auctioned off

People’s Bank of China not trying "to suppress or discriminate against Bitcoin"

SmartMetric biometric payment card to enable P2P transfer of bitcoins

 

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A weekly roundup of the latest news and analysis, sent every Wednesday.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Electronic Payments International