Britain to scrap VAT taxes on Bitcoin trades

[Boris-The-Blade]

Damned taxes!

[yellowwings]

I still don't get exactly when income taxes become due.

Say you're running mining pools for different cryptos, with the intention of not converting the coins from the pool fee to fiat for a year or two.   The following could also apply to miners.

Do income taxes only become due at the moment you convert to fiat?

Or is there some horrible ruling that income taxes are due immediately the coins are mined, in which case this will be terrible to work out the value if coins from multiple different cryptos are coming in from mining all the time.  Also do you then also get charged capital gains on whatever's left when you convert that to fiat, in which case you're taxed twice over, which could result in up to 56% taken in tax in total (40% gone initially in Income Tax if you're lucky enough to be a higher rate tax payer, then up to another 28% of the remainder gone in capital gains)?

[franky1]

Do income taxes only become due at the moment you convert to fiat?

yes.... now that was simple

although i dont want to add confusion by talking about trading shares. but.... when trading shares you can buy and sell them as much as you like. but only when you finally put the funds back into your bank account, do you then class the profit as income.

[FlappySocks]

I'm very sure most accountants would not have a clue about bitcoin.

Mine didn't.  When he was preparing my companies end of year accounts, he spotted some transactions he was unsure about, and wanted to know what they were for.  I think he thought he had caught me with my hands in the till.  They were payments to localbitcoin users.  I explained what is was, but he didn't understand.

Anyway, this news on the UK scrapping VAT taxes is welcome but nothing to get excited about.  Britain is closed for Bitcoin business.  You cant open a new bank account if there is a crypto anywhere in your business plan, and existing businesses get lent on - TransferWise being a good example.  I used to be, the best way to send UKP to bitcoin exchanges, was using TransferWise, until the banks told them to stop.

[V4Vendettas]

I'm very sure most accountants would not have a clue about bitcoin.

Mine didn't.  When he was preparing my companies end of year accounts, he spotted some transactions he was unsure about, and wanted to know what they were for.  I think he thought he had caught me with my hands in the till.  They were payments to localbitcoin users.  I explained what is was, but he didn't understand.

Anyway, this news on the UK scrapping VAT taxes is welcome but nothing to get excited about.  Britain is closed for Bitcoin business.  You cant open a new bank account if there is a crypto anywhere in your business plan, and existing businesses get lent on - TransferWise being a good example.  I used to be, the best way to send UKP to bitcoin exchanges, was using TransferWise, until the banks told them to stop.

Still its a great step in the right direction. I wont lie I'm actually excited about it but also amazed our government is not openly anti bitcoin.

[FlappySocks]

also amazed our government is not openly anti bitcoin.

So am I, although in a sense they are, by not doing anything.  HMRC didn't really have a choice. They were under pressure to show their hand.  Accountants cant do their job without clear guidelines.
The government on the other hand, are doing nothing and letting the banks ban it by stealth.  Until that stops, the UK is closed for crypto business.

[V4Vendettas]

I have no doubt UK banks are being right pigs over bitcoin. Are you saying its hard to get a bank account for a bitcoin centred company or its hard to get a loan for said company? Seems if its the first then the only way is to establish the company first and then introduce bitcoin payment systems later ? Yea your right its crap for bitcoin but hey who said this was going to be easy  

Also who are scan.co.uk banking with?

[FlappySocks]

Hard to get a bank accounts for bitcoin related business.  Existing businesses, such as Transferwise have been in trouble too. https://transferwise.com/blog/2013-04/notice-to-bitcoin-users-april-2013/

I guess it's harder for a bank to drop scan.co.uk as a customer, both financially, and from the negative press it might generate.

[franky1]

Hard to get a bank accounts for bitcoin related business.  Existing businesses, such as Transferwise have been in trouble too. https://transferwise.com/blog/2013-04/notice-to-bitcoin-users-april-2013/

I guess it's harder for a bank to drop scan.co.uk as as a customer, both financially, and from the negative press it might generate.

if only virginmoney done business accounts, im sure Richard Branson would vouch for bitcoin

[Nxtblg]

I thought it was Capital Gains tax, not Income tax?

no no no, cant you lot read or atleast research.

calm down. I did research old topics and people were saying Capital Gains tax, that's why i asked.

I don't know anything about UK tax law, but in Canada the law implies that you pay capital gains tax unless your transactions are frequent. Then, Canada Revenue deems you to be a professional trader or merchant of some sort: buying and selling is your line of work. If deemed as such, you or your business pays at ordinary income tax rates.

It's reasonable, for tax laws, so I'm guessing the same system is in place in the UK.

[grifferz]

Also who are scan.co.uk banking with?

It doesn't really matter as they are using Bitpay to turn it into GBP right away, so no bitcoin accounting needed and bank need never know.

[V4Vendettas]

Also who are scan.co.uk banking with?

It doesn't really matter as they are using Bitpay to turn it into GBP right away, so no bitcoin accounting needed and bank need never know.

I read somewhere they are keeping a % of transactions. I would go search for it but to busy watching some poor guy called Satoshi get doxxed