No VAT on Bitcoin mining
Adam Pike, News Editor
4 Mar 2014, 9:30 a.m.
HMRC has confirmed that VAT will not apply to the mining of bitcoin as EU law does not allow such a tax to be levied on currencies, however, income and corporation taxes would still apply. In particular, the profits and losses relating to currency movements will be subject to UK corporation tax.
Financial regulators and tax authorities have been undecided as to how they can regulate bitcoin with many seeing it as a route for money laundering and criminal activity. Russia has effectively outlawed all transactions and China has banned all banks from executing trades. Pressure is also mounting on the U.S. to do the same after the bitcoin exchange Mt. Gox went bankrupt last week after losing an estimated £233 million of customers money.
The value of bitcoin has been extremely volatile and the value of one bitcoin currently stands at $658.