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Author Topic: [2014-03-02] - FT.com Britain To Scrap Bitcoin Tax  (Read 1057 times)
steelboy
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March 02, 2014, 06:45:48 PM
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Here's some good news for UK Bitcoin holders.

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Britain’s tax authority plans to ditch its levy on Bitcoin trading only days after the collapse of Mt Gox, one of the virtual currency’s leading exchanges, losing almost $500m of customer deposits.

The UK’s welcoming approach to Bitcoin contrasts with the approach of other countries, amid concerns about its use for tax evasion and money laundering as well as its notoriety for wide fluctuations in value.

In a meeting with a group of UK traders last week, HM Revenue & Customs said it would not charge the 20 per cent VAT tax on trades, which entrepreneurs had complained made their businesses globally uncompetitive. HMRC went a step further, saying it would not charge the tax on their margins either.

The ruling sidesteps the thorny question of whether to class Bitcoin as a currency, but effectively treats it as such, and bases its policy on the EU law that exempts payments and transfers of “negotiable instruments” from tax.

Governments worldwide have wrestled with the conundrum of how to deal with virtual currencies, as businesses hoping to profit from a small but growing economy have lobbied for regulation that would allow them to flourish.

Singapore has issued tax guidelines for Bitcoin, while an internal US watchdog has criticised the Internal Revenue Service for not doing so.
“If they had added VAT that would have destroyed us, there would have been no point in starting this business at all,” said Jonathan Harrison, who has a start-up working on bringing Bitcoin ATM machines to the UK. “It’s great that the UK authorities are seeing Bitcoin as an innovative technology that can help the economy.”

The European Banking Authority has warned that consumers are not protected by any refund rights under EU law when using virtual currencies for commercial transactions. China has banned its banks from handling Bitcoin, while Russia and Vietnam have declared transactions illegal.

The decision comes as the Bitcoin Foundation, the non-profit advocacy group, told the Financial Times it would redomicile to the UK this spring from the US. Some Bitcoin users see the UK as a more favourable jurisdiction in the wake of Edward Snowden’s revelations about the US government spying on the internet as well as centre of a buoyant “fin-tech” industry.

The Bitcoin Foundation, set up to develop the software that runs the currency and to lobby governments and regulators, is searching for staff and office space in London, according to board executive director Jon Matonis.

Last year HMRC had classed Bitcoin as a voucher, charging VAT on the value of the coin itself. Businesses in the UK had protested against that treatment, saying it would drive customers abroad to countries where no charge was levied. HMRC later withdrew that guidance after meetings over the course of last year.

Other taxes, such as corporation tax, would still apply. The policy applies to all business that buy, sell or exchange Bitcoin.
The total value of all Bitcoins in circulation is $6.9bn, up from $150m a year ago, according to BlockChain.info. The price of Bitcoin stood at $555 on Sunday, according to the BTC-E exchange, down from a peak of $1,242 in December.

The tax authority said: “HMRC has been working closely with the Bitcoin industry on the tax treatment of trading in Bitcoins and commission. We will be issuing guidance shortly.”

Simon Dixon at Bank to the Future, which helps start-ups to raise funding and has 10 working on Bitcoin projects, said: “The Bitcoin start-up community is booming. If we get favourable regulations that will build a lot of interest from start-ups around the world to come and base themselves in London.”
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PatMan
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March 02, 2014, 10:22:21 PM
 #2

Good news, but here in the UK the Government is a lap doggie to the banks & the US - watch them buckle under pressure from both & quickly change their minds to appease their masters...... Cheesy Cheesy

"When one person is deluded it is called insanity - when many people are deluded it is called religion" - Robert M. Pirsig.  I don't want your coins, I want change.
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March 03, 2014, 12:56:17 AM
 #3

Good news for anyone starting an exchange in UK.

No tax on the margin either, almost too good to be true.

Based on this I'd expect to see lots of exchanges popping up in the UK.



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PatMan
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March 03, 2014, 02:58:42 AM
 #4

Good news for anyone starting an exchange in UK.

No tax on the margin either, almost too good to be true.

Based on this I'd expect to see lots of exchanges popping up in the UK.

That will never happen I'm afraid, the UK is the Rothschilds playground & the banks won't allow it. I remember the big fuss about coinfloor opening up in the UK many, many months ago so I went & signed up immediately. What happened - nothing. It's still not off the ground because the banks are blocking their every move. Hell, they're even freezing accounts of people buying/selling bitcoin with their own cash. The Government doesn't run the UK, the banks do - and they don't like the mighty BTC at all.

"When one person is deluded it is called insanity - when many people are deluded it is called religion" - Robert M. Pirsig.  I don't want your coins, I want change.
Amazon UK BTC payment service - https://bitcointalk.org/index.php?topic=301229.0 - with FREE delivery!
http://www.ae911truth.org/ - http://rethink911.org/ - http://rememberbuilding7.org/
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March 03, 2014, 04:15:23 AM
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Where's your source from? I contacted the HMRC about Bitcoin and this voucher shit doesn't apply anymore, you pay capital gains tax on Bitcoin which is a maximum of 28% and you don't pay anything extra.
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March 03, 2014, 10:08:09 AM
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Where's your source from? I contacted the HMRC about Bitcoin and this voucher shit doesn't apply anymore, you pay capital gains tax on Bitcoin which is a maximum of 28% and you don't pay anything extra.

FT.com, as it says in the header. It's legit - I just checked it myself - but the FT does come out with some BS sometimes...... Cheesy Cheesy

"When one person is deluded it is called insanity - when many people are deluded it is called religion" - Robert M. Pirsig.  I don't want your coins, I want change.
Amazon UK BTC payment service - https://bitcointalk.org/index.php?topic=301229.0 - with FREE delivery!
http://www.ae911truth.org/ - http://rethink911.org/ - http://rememberbuilding7.org/
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March 03, 2014, 02:17:24 PM
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Good news, but sadly won't change the UK banks' point-blank refusal to deal with any Bitcoin related business. Worst possible place to start an exchange at present until (or if) this is remedied.
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March 03, 2014, 07:00:24 PM
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This IS the first step and WILL lead to bank acceptance of bitcoin businesses and exchanges in the UK. Anyone every read Liar's Poker??? Junk bond market wasn't built in a day, any new market takes years of lobbying, regulation changes, speculative investment, etc. It's coming folks, and the bitcoin economy will grow by hundreds of times....
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March 03, 2014, 07:54:25 PM
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This IS the first step and WILL lead to bank acceptance of bitcoin businesses and exchanges in the UK.

I don't see how it is possible to force banks to work with Bitcoin businesses. It's their decision.


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March 03, 2014, 11:11:00 PM
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Problem with our Banks here in the UK is that none of them are, in any way, progressive. They are old, creaky institutions. Barclays, HSBC, RBS and Lloyds are our main Banks ... and they are virtually indistinguishable in terms of (poor) levels of service and a consistent need for the taxpayer to bail them out (OK, Barclays and HSBC didn't, but they benefited from the knowledge it was guaranteed if required). HSBC are particularly bad and no longer allow cash withdrawals over around £3k without documentary evidence of what you will be using it for! Lucky no customers ever asked them what they were going to be using THEIR money for, they might have been sick.

Not sure if anyone has approached the new guys yet. Metro Bank (which tries nauseously hard to come across as 'hip'), and soon Branson's Virgin Bank (formally the doomed Northern Rock).
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March 04, 2014, 11:16:23 AM
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http://www.hmrc.gov.uk/briefs/vat/brief0914.htm
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