Andrew Needham looks at the VAT position of income received from and charges made in connection with the use of cryptocurrencies such as Bitcoin.
Cryptocurrencies such as Bitcoin are decentralised digital currencies that do not physically exist and are independent of central banks or national authorities.
The reasons for Bitcoin’s existence are vague. It has been suggested that it was founded to free people from government oversight and from the need to pay banks for even the simplest business transaction.
Further, given the rapid increase in the ‘surveillance state’ many wish to protect their privacy, so Bitcoin may be attractive even for the innocent. It is no longer a currency used by a bunch of eccentric techies around the world. Many businesses accept it, some as a gimmick, but others are primarily attracted by its speed, freedom from bank charges and convenience. <>
