Bitcoin traders have at least a little bit of good news, given all the bad of late regarding MtGox, in that HMRC has decided that Bitcoin transactions won’t be subject to VAT in the UK any longer.
So no more 20 per cent tax going to the government, then, and furthermore HMRC isn’t going to levy VAT on the mining of Bitcoins, either.
HMRC’s guidance stated that Bitcoins “are exempt because they fall within the definition of ‘transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments.’”
However, as the BBC notes in its report on the matter, corporation tax and income tax will still be in place when it comes to the virtual currency.
Last week, the Bitcoin world was shaken by the news that MtGox had filed for bankruptcy in Japan, following the major Bitcoin exchange’s disappearance offline earlier in the week.
CEO Mark Karpeles apologised for the trouble he had caused investors when he appeared in a Japanese court to make the filing. However, MtGox customers are already clamouring to file suits against the exchange, over the negligence which allowed for a huge theft of the cryptocurrency (the reason MtGox was forced to shutter its operation).
If you're sick of Bitcoin by now and looking for other virtual currency options, then see our article on 5 cryptocurrency alternatives to Bitcoin.