https://help.bittylicious.com/index.php?title=Bitcoins_and_VAT&feed=atom&action=historyBitcoins and VAT - Revision history2024-03-28T18:43:41ZRevision history for this page on the wikiMediaWiki 1.40.1https://help.bittylicious.com/index.php?title=Bitcoins_and_VAT&diff=163&oldid=prevCocodude at 16:10, 29 November 20132013-11-29T16:10:09Z<p></p>
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<td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 16:10, 29 November 2013</td>
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<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>[http://www.hmrc.gov.uk/ HMRC] (the primary tax agency in the UK) is stifling new financial technology businesses because of their classification of Bitcoins and other virtual currencies. In a nutshell, HMRC do not consider these to be currencies, but instead vouchers which in most cases are treated just as any other asset.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>[http://www.hmrc.gov.uk/ HMRC] (the primary tax agency in the UK) is stifling new financial technology businesses because of their <ins style="font-weight: bold; text-decoration: none;">current </ins>classification of Bitcoins and other virtual currencies. In a nutshell, HMRC do not consider these to be currencies, but instead vouchers which in most cases are treated just as any other asset.</div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div> </div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">'''Note: This is based on my understanding. Please ask HMRC yourself as they might change their guidance'''</ins></div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>Many Bitcoin sellers aim to buy in bulk from other dealers and then sell them on in much smaller amounts on to others. Because HMRC do not consider virtual currencies as 'real' currencies, any sales above the VAT threshold of just over £70,000 are VAT liable, and there is no way to claim VAT back with this sort of technology. Ultimately, margins are quite low in the Bitcoin world (up to 5%) and it is uncompetitive to charge 25% above the going Bitcoin rate. These rules make running any reasonably sized Bitcoin trading business not viable.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>Many Bitcoin sellers aim to buy in bulk from other dealers and then sell them on in much smaller amounts on to others. Because HMRC do not consider virtual currencies as 'real' currencies, any sales above the VAT threshold of just over £70,000 are VAT liable, and there is no way to claim VAT back with this sort of technology. Ultimately, margins are quite low in the Bitcoin world (up to 5%) and it is uncompetitive to charge 25% above the going Bitcoin rate. These rules make running any reasonably sized Bitcoin trading business not viable.</div></td></tr>
</table>Cocodudehttps://help.bittylicious.com/index.php?title=Bitcoins_and_VAT&diff=103&oldid=prevCocodude at 14:10, 14 October 20132013-10-14T14:10:49Z<p></p>
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<td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">← Older revision</td>
<td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 14:10, 14 October 2013</td>
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<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>[http://www.hmrc.gov.uk/ HMRC] in the UK is stifling new financial technology businesses because of their classification of Bitcoins and other virtual currencies. In a nutshell, HMRC do not consider these currencies, but vouchers which are treated just as any other asset.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>[http://www.hmrc.gov.uk/ HMRC] <ins style="font-weight: bold; text-decoration: none;">(the primary tax agency </ins>in the UK<ins style="font-weight: bold; text-decoration: none;">) </ins>is stifling new financial technology businesses because of their classification of Bitcoins and other virtual currencies. In a nutshell, HMRC do not consider these <ins style="font-weight: bold; text-decoration: none;">to be </ins>currencies, but <ins style="font-weight: bold; text-decoration: none;">instead </ins>vouchers which <ins style="font-weight: bold; text-decoration: none;">in most cases </ins>are treated just as any other asset.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>Many Bitcoin sellers aim to buy in bulk from other dealers and then sell them on in much smaller amounts on to others. Because HMRC do not consider virtual currencies as real currencies any sales above the VAT threshold of just over £70,000 are <del style="font-weight: bold; text-decoration: none;">VATtable</del>, and there is no way to claim VAT back with this sort of technology. Ultimately, margins are quite low in the Bitcoin world (up to 5%) and <del style="font-weight: bold; text-decoration: none;">charging </del>25% above the going Bitcoin rate <del style="font-weight: bold; text-decoration: none;">makes </del>any reasonably sized business not viable.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>Many Bitcoin sellers aim to buy in bulk from other dealers and then sell them on in much smaller amounts on to others. Because HMRC do not consider virtual currencies as <ins style="font-weight: bold; text-decoration: none;">'</ins>real<ins style="font-weight: bold; text-decoration: none;">' </ins>currencies<ins style="font-weight: bold; text-decoration: none;">, </ins>any sales above the VAT threshold of just over £70,000 are <ins style="font-weight: bold; text-decoration: none;">VAT liable</ins>, and there is no way to claim VAT back with this sort of technology. Ultimately, margins are quite low in the Bitcoin world (up to 5%) and <ins style="font-weight: bold; text-decoration: none;">it is uncompetitive to charge </ins>25% above the going Bitcoin rate<ins style="font-weight: bold; text-decoration: none;">. These rules make running </ins>any reasonably sized <ins style="font-weight: bold; text-decoration: none;">Bitcoin trading </ins>business not viable.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>The UK is losing out on a large amount of tax because many businesses need to incorporate elsewhere in order to be able to grow their businesses. Potential solutions are:</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>The UK is losing out on a large amount of tax because many businesses need to incorporate elsewhere in order to be able to grow their businesses. Potential solutions <ins style="font-weight: bold; text-decoration: none;">HMRC should consider </ins>are:</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>* HMRC actually consider virtual currencies as real currencies. This removes all VAT implications, but brings in potentially tricky issues such as financial regulations.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>* HMRC actually consider virtual currencies as real currencies. This removes all VAT implications, but brings in potentially tricky issues such as financial regulations.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>* HMRC allow the VAT margin rule to apply to virtual goods. This means that VAT will be payable on the difference between selling and buying prices, much like a trader in second hand goods.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>* HMRC allow the VAT margin rule to apply to virtual goods. This means that VAT will be payable on the difference between selling and buying prices, much like a trader in second hand goods.</div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;"></ins></div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">It is understandable that HMRC should think about the implications of any of these decisions, but Bitcoin businesses have been on HMRC's radar for some time now and a forward thinking decision is long overdue.</ins></div></td></tr>
</table>Cocodudehttps://help.bittylicious.com/index.php?title=Bitcoins_and_VAT&diff=102&oldid=prevCocodude: Created page with "[http://www.hmrc.gov.uk/ HMRC] in the UK is stifling new financial technology businesses because of their classification of Bitcoins and other virtual currencies. In a nutshel..."2013-10-14T14:07:38Z<p>Created page with "[http://www.hmrc.gov.uk/ HMRC] in the UK is stifling new financial technology businesses because of their classification of Bitcoins and other virtual currencies. In a nutshel..."</p>
<p><b>New page</b></p><div>[http://www.hmrc.gov.uk/ HMRC] in the UK is stifling new financial technology businesses because of their classification of Bitcoins and other virtual currencies. In a nutshell, HMRC do not consider these currencies, but vouchers which are treated just as any other asset.<br />
<br />
Many Bitcoin sellers aim to buy in bulk from other dealers and then sell them on in much smaller amounts on to others. Because HMRC do not consider virtual currencies as real currencies any sales above the VAT threshold of just over £70,000 are VATtable, and there is no way to claim VAT back with this sort of technology. Ultimately, margins are quite low in the Bitcoin world (up to 5%) and charging 25% above the going Bitcoin rate makes any reasonably sized business not viable.<br />
<br />
The UK is losing out on a large amount of tax because many businesses need to incorporate elsewhere in order to be able to grow their businesses. Potential solutions are:<br />
<br />
* HMRC actually consider virtual currencies as real currencies. This removes all VAT implications, but brings in potentially tricky issues such as financial regulations.<br />
* HMRC allow the VAT margin rule to apply to virtual goods. This means that VAT will be payable on the difference between selling and buying prices, much like a trader in second hand goods.</div>Cocodude