Is bitcoin subject to VAT in the UK?

[monsterer]

Hi guys,

I'm not really clear on this - does anyone have any clarification on whether you would have to pay VAT on bitcoins coming into your business?

Chees, Paul.

[franky1]

bitcoins themselves no. not unless a single bitcoin was valued at £6k each (look into assets on HMRC)
EDIT: bitcoins themselves do not have VAT on them, much like swapping  pounds for dollars or euros. however capital gains would need to be paid if bitcoins exceeded £6k per coin.
http://www.hmrc.gov.uk/cgt/possessions/basics.htm#2

and income tax on any profit you make when cashing out your bitcoins back into pound coins

but if your a business selling products and the products are VAT rateable. then price them in bitcoins at the pound rate inc VAT. and when you cash out the bitcoin, pay the VAT to hmrc.

EG
sell a TV
EX VAT =£560
INC VAT =£700

sell for bitcoin at 10BTC (£700 current value)

cash out bitcoins and pay £140 VAT.

[monsterer]

bitcoins themselves no. not unless a single bitcoin was valued at £6k each (look into assets on HMRC)

Aren't they over £70 / BTC right now?

[franky1]

bitcoins themselves no. not unless a single bitcoin was valued at £6k each (look into assets on HMRC)

Aren't they over £70 / BTC right now?

https://bitbargain.co.uk/buy quotes

Mt.Gox GBP bid   £ 65.59635
Mt.Gox GBP ask   £ 66.25000
Mt.Gox GBP last   £ 65.41026
Mt.Gox GBP 24h   £ 67.77741
1 GBP   1.5441 USD

http://bitcoinity.org/markets/mtgox/GBP quote £66.59 at time of posting this.

i rounded up to the nearest £10 just to be safe

[monsterer]

http://bitcoinity.org/markets/mtgox/GBP quote £66.59 at time of posting this.

i rounded up to the nearest £10 just to be safe

Sorry, I missed the k on the end of the £6 which you initially posted!

[scottishcoins]

What about if I have a business that is VAT registered then maybe order for that business some new high end computer hardware, would it be acceptable to start mining Bitcoin on the equipment I got without paying VAT on it and then sell on the Bitcoin. Suddenly my mining hardware would cost 20% less. Then rather than pay myself a wage from the business it's activities just fund the power bill for mining and keep afloat, I meanwhile sit and work drawing in Autocad having a merry old time and sell off the Bitcoin as they are mined.


*Since some friendly HMRC staff are probably keeping an eye on this now, I don't plan to do this myself, just asking the question of "Why not?"

[monsterer]

So you're asking if you can buy a computer through your business, then claim back the VAT?

Obviously the answer is yes...?