Bitcoin Forum

Thought this was worth registering for...

"HMRC, the UK government's tax-colllecting body, says people do not incur a tax liability when trading in bitcoins as long as they do not turn their profits into regular cash. Once conventional money is involved, however, the income could become taxable, HMRC told New Scientist"  

This is an excerpt from the weekly print edition of New Scientist which came out in the UK last week (date on edition 4th June) - it's largely positive, compares Bitcoin to Paypal and Skype, and has an interview with Andresen

Preview here but registration for the full article
http://www.newscientist.com/article/mg21028155.600-future-of-money-virtual-cash-gets-real.html (http://www.newscientist.com/article/mg21028155.600-future-of-money-virtual-cash-gets-real.html)

That's good news!

Man does anyone have a subscription to that site that could post the whole article?  Great find.

Yes  ;D

http://stirling-westrup-tt.blogspot.com/2011/06/tt-ns-2815-future-of-money-series.html

thanks

Good article. Well thought out and researched.

Someone needs to launch a competitor, pronto!

This is a massive understatement. :P

Approximating 350 MHash per GPU  works out about 15,000 GPU's for the network's ~5 THash/s ... so actually an overstatement.

Some people seem to have an agenda in wildly over-stating how much hardware and power is going into the bitcoin network. Yes it is large by computing standards but it is completely insignificant compared with other industrial activities that are happening 24 hours a day around the world, including the current banking systems.

Deepbit alone has ~2 THash/s... does it really make up that much of the network?

No agenda, just misinformed.  Didn't do the math but it didn't sound like enough.

Oh, the agenda comment was not directed towards you ... the source of the source most likely. Just seen some wild numbers bandied around, 1 blow-hard was talking about how much weight of steel it represented or some such nonsense.  ::) ... and his numbers were laughably wrong anyway.

That's good to know and what I thought was the case. It's probably best to check with your local tax accountant, though, since how this is handled exactly might be different in different countries. It also might change over time. Right now, I think Bitcoins can be considered a commodity, in case Bitcoins become an actual currency, things might change.

At the moment, I think buying Bitcoins is kind of like buying credits with some services (like Fotolia, for instance); but the more there is a "Bitcoin-based economy", the more countries will try to directly tax Bitcoin transactions.

I think registering with New Scientist and writing friendly letters to the editor might be a good idea :-)

350 MHash per GPU average? Perhaps you could re-calibrate including the nvidia vs Ati market share ^^
your figure is not so much off anyway, still I think it's quite a big number... when you say "nothing compared to everyday stuff", well, I think there's a bit more than what you think... it's a geeky thing but it's still impressive!

Yes, impressive for the computer power of the network. I'm kind of annoyed there hasn't been a slashdot article on the technical network aspect achievement alone. If nothing else it has wiped folding@home's bottom, and the hardware come together in not much more than 8 months.

In the bigger scheme power usage and hardware in the industrial sphere it is nothing. A small fraction of the gaming market or Xbox network power consumption and hardware probably even.

I've been researching heavily into the taxes regarding Bitcoin and this is a great find, thanks.

It's from 2011 though.

Things happen at snail pace in HMRC so I doubt there's much change in 2014 :)

I wish we could get that statement from the IRS in the United States. I am getting ready to file and I will be treating my trades like stocks.

I was fortunate in my trading. I moved Bitcoins to an exchange, bought Namecoin and Primecoin (should have got Litecoin too, my timing was good, I could have bought almost any of the alts) then the alt's had that 10x growth from less than a dollar. Eventually I traded half my alt coins positions and traded them back to regain my original position for Bitcoins. So my alt coin cost is zero but I never cashed anything into dollars.

It doesn't make sense for me to take capital gains on Bitcoin when I exchanged them for Namecoin and Primecoin but that's probably what I'll have to do for fear of getting accused of hiding something.

Glad to know I'm not gonna be thrown in jail for holding Bitcoins.

They wont through you in jail, but they'll be watching the exchanges and come down on you like a ton of bricks if you trade your coins for cash and don't pay taxes on it. I'd stick to face to face trades if you're selling a lot of coins. Or just pay your taxes  :D

in actual fact they dont inspect or watch exchanges, they just look at your bank accounts for amounts over your tax free threshold. nothing has changed in the last few decades, this is how HMRC has always worked.

this is mainly done if they get a tip-off. government agencys work mainly retroactive in regards to general public. they only work pro-active inregards to people or communications that highlight valuable information.

Interesting, but are you sure this is the case? Sources etc? I know they don't have the resources to go after everyone who's diddling their taxes, but I wouldn’t be surprised if they went after a few big Bitcoin busts to put the fear out there.