Skip to main content Policy paper Revenue and Customs Brief 9 (2014): Bitcoin and other cryptocurrencies From: HM Revenue & Customs Part of: Revenue and Customs Briefs and Tax agent and adviser guidance Published: 3 March 2014 HM Revenue and Customs tax treatment of income received from Bitcoin and other cryptocurrencies.Help us improve GOV.UK Don’t include personal or financial information like your National Insurance number or credit card details.What you were doing What went wrongThe UK's tax authority has scrapped plans to charge value added tax (VAT) on Bitcoin trading.In new guidance, HM Revenue & Customs also said it would not levy the 20% tax on the creation, or so-called 'mining', of the virtual currency.The move comes just days after the collapse of leading Bitcoin exchange, MtGox, and with it the loss of almost $500m (£300m) in customer deposits.HMRC said corporation and income taxes would still apply.The global market for Bitcoins, a virtual currency created, or 'mined' through complicated computer algorithms, is worth about $7 billion (£4.2bn) at current market rates.

Countries and their tax authorities have been grappling with how to regulate it, with some seeing it as a route for tax evasion or money laundering.Russia has declared transactions illegal, China has banned its banks from handling Bitcoin trades, and there have been calls for the US to do the same.Singapore has imposed a tax on Bitcoin trading and using it to pay for services, after classifying it as goods, rather than a currency.However, HMRC's guidance issued on Monday, said VAT would not be levied, on the basis of EU rules that apply to currencies.It said Bitcoin trading and other activities, like charges for verifying transactions, "are exempt because they fall within the definition of 'transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments'".Bitcoin traders and supporters had been calling for HMRC to scrap its VAT plans for the currency, arguing it would make their businesses globally uncompetitive, or even unviable.But VAT will apply to suppliers of goods and services sold in exchange for Bitcoin, based on the sterling value of the virtual currency at the point of sale, HMRC said.And the profits or losses of companies using Bitcoins, and on exchange movements between currencies, will be subject to corporation tax, the government agency added.bitcoin ebay scams

Last month leading Bitcoin exchange, Tokyo-based MtGox, filed for bankruptcy after losing an estimated 750,000 of its customers' Bitcoins.It said there was a "high probability" the Bitcoins had been stolen.The currency has been highly volatile since its inception, and particularly in the last year.sell bitcoin moneygramThe price of one Bitcoin stands at about $658, down from a peak of $1,242 in December.bitcoin ebay scamsThis brief sets out HM Revenue and Customs (HMRC) position on the tax treatment of income received from, and charges made in connection with, activities involving Bitcoin and other similar cryptocurrencies, specifically for VAT, Corporation Tax (CT), Income Tax (IT) and Capital Gains Tax (CGT).bitcoin trade tickerAnyone making charges or otherwise receiving income, in whatever form, from activities involving Bitcoin (or other cryptocurrencies), including: Bitcoin is seen as the world’s first decentralised digital currency, otherwise known as a ‘cryptocurrency’.free bitcoin onion

The advent of cryptocurrencies such as Bitcoin is a new and evolving area and determining their legal and regulatory status is ongoing.Cryptocurrencies have a unique identity and cannot therefore be directly compared to any other form of investment activity or payment mechanism.bitcoin chart tickerHMRC understands that Bitcoin operates via a peer to peer network, independent of any central authority or bank.cours du bitcoin sur un anAll functions such as issue, transaction processing and verification are managed collectively by this network.bitcoin module drupalAll Bitcoin transactions are recorded in a shared public database called a ‘block-chain’.bitcoin seed bankNew Bitcoin is produced when a new block is attached to the chain.

A new block can only be added to the chain when the answer to a complex cryptographic algorithm is solved.Participants in this activity are known as ‘miners’.As well as mining, activities include the buying and selling of Bitcoin and providing exchange facilities for parties to trade Bitcoin with recognised currencies.Bitcoin may be held as an investment or used to pay for goods or services at merchants where it is accepted.In the UK, there are already a number of outlets, including pubs, restaurants and internet retailers, that accept payment by Bitcoin.As an EU tax, the VAT treatment for cryptocurrencies adopted by the UK must be consistent with any treatment that may eventually be implemented across the EU.Given this, the evolutionary nature of these cryptocurrencies and the legal and regulatory environments in which they currently operate, this brief outlines HMRC’s provisional VAT treatment pending further developments; in particular, in respect of the regulatory and EU VAT position.

Taxpayers can rely on the VAT treatment outlined below unless and until HMRC announces any changes.Any changes will not apply retrospectively.For VAT purposes Bitcoin and similar cryptocurrencies will be treated as follows below, this in no way reflects on how they are treated for regulatory or other purposes: However, in all instances, VAT will be due in the normal way from suppliers of any goods or services sold in exchange for Bitcoin or other similar cryptocurrency.The value of the supply of goods or services on which VAT is due will be the sterling value of the cryptocurrency at the point the transaction takes place As with any other activity, whether the treatment of income received from, and charges made in connection with, activities involving Bitcoin and other similar cryptocurrencies will be subject to CT, IT or CGT depends on the activities and the parties involved.Whether any profit or gain is chargeable or any loss is allowable will be looked at on a case-by-case basis taking into account the specific facts.