Bitcoin Taxation Under Review
Bitcoin Is Being Used For Tax Evasion & Money Laundering
The taxation rate of the popular virtual currency Bitcoin has come under review by HMRC. The review comes amid concerns that the currency could currently be used for tax evasion purposes or even for money laundering.
Concerns Raised Against The Attached Bitcoin VAT Rate
Concerns have also been raised by traders about the attachment of the 20% VAT rate to the currency. They say this makes their rates uncompetitive compared to those in other parts of the world, and encourages them to consider operating in other jurisdictions.
In a statement, HMRC said that “We have held constructive meetings with stakeholders but this is a complex issue, and we will continue to listen to arguments for alternative VAT treatments under existing VAT law.”
Should Bitcoin Be Treated As An Official Currency?
The UK has dismissed the possibility of treating Bitcoin in the way it would treat real, official currencies. A number of alternative approaches have been suggested, including treating it as property or in a similar way to unofficial currencies used on a local level.