Some good news is coming in the wake of the Mt. Gox hysteria this week. It is being reported that HM Revenue & Customs (HMRC) will be dumping a 20 percent VAT (value-added tax) on bitcoin trades in the United Kingdom, according to the Financial Times.
The move comes amidst a slew of complaints from entrepreneurs in the country, who said the tax challenged their competitiveness in the global market.
The decision reportedly came from a meeting that took place last week between the tax authority and UK-based traders. At that meeting, it was also said that HMRC would not tax margins.
The bitcoin community is undoubtedly pleased with HMRC’s decision, as it further validates the use of bitcoin as a currency. It will also help bitcoin-related start-ups in the country.
“If they had added VAT that would have destroyed us, there would have been no point in starting this business at all,” said Jonathan Harrison to FT, a bitcoin ATM start-up in the UK. “It’s great that the UK authorities are seeing Bitcoin as an innovative technology that can help the economy.”
The HMRC was quoting as saying: “HMRC has been working closely with the Bitcoin industry on the tax treatment of trading in Bitcoins and commission. We will be issuing guidance shortly.”
