HMRC scraps VAT on bitcoin

HMRC has announced it will remove the 20% VAT currently on virtual currency bitcoin, after a period of determining its tax treatment. 

Bitcoin was previously treated as a voucher for tax purposes and was subject to 20% VAT, but traders in the UK protested that this was driving business away from the country. 

In new guidance published this week, HMRC said it would scrap VAT on the mining (or creation) of the currency.

However, it will still be subject to corporation tax, income tax and capital gains tax. 

HMRC said the guidance is provisional VAT treatment, which is pending further developments.

The move comes recently after the collapse of major bitcoin trading exchange MtGox, which shut down las...

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Comments

VAT free drinks?

Briar | | Permalink

So if I buy drinks in a pub with bitcoins, do I get them VAT free and therefore cheaper?

daveforbes's picture

@briar

daveforbes | | Permalink

No, but as they are several hundred £ each so if you are spending bitcoins (plural) at the pub you will probably get discount anyway.