GN Law - Our People News and TV

Tax Treatment of Bitcoin and other Cryptocurrencies

Our People - GN
Sarena Spicer
9 April, 2018

The law has been slow to adapt and regulate Bitcoin and other cryptocurrencies. HM Revenue and Customs published a policy paper on 3 March 2014 setting out their tax treatment of income received from and charges made in connection with activities involving Bitcoin and similar currencies, specifically for VAT, Corporation Tax, Income Tax and Chargeable Gains Tax.


Income received from Bitcoin mining activities is considered outside the scope of VAT as mining does not constitute an economic activity for VAT purposes because there is an insufficient link between services provided and consideration (money/value) received.

When Bitcoin is exchanged for Sterling or other currencies including Euros or Dollars, no VAT will be due on the value of the Bitcoins themselves.

Charges made above the value of the Bitcoin for arranging or carrying out any transactions in Bitcoin will be exempt from VAT.

Company Tax

For virtual currencies, the general rules on foreign exchange and loan relationships apply. According to HMRC, no special tax rules for Bitcoin transactions are required. The profits and losses of companies entering into transactions involving Bitcoin would be reflected in accounts and taxable under normal company tax rules.

Income Tax

The tax treatment of Bitcoin under income tax is similar to treatment under company tax. The profits and losses of non-incorporated business on Bitcoin transactions must be reflected in their accounts and will be taxable on normal income tax rules.

Chargeable Gains Tax

Gains and losses incurred on Bitcoin or other cryptocurrencies are chargeable or allowable as a loss for CGT if they accrue to an individual.

Future Guidance

HMRC will issue further guidance as needed given the ever fluctuating nature of cryptocurrencies.

Related Articles

When someone passes away, their loved ones are often left with numerous emotional and legal responsibilities. Two terms that frequently arise during this process are ‘power of attorney’ and ‘probate’. But how do they differ?
Our People - Andrew Guile
If a person lacks testamentary capacity, the Court of Protection can order a will, known as a statutory will, to be created on their behalf.
Our People - Samuel Cole
Executors can act together or alone, but an executor cannot go against the terms of the will, breach their fiduciary duty, fail to act, self-deal, embezzle or harm the estate through neglect.
Our People - Andrew Guile
Receiving an inheritance can be the end of a complex process, and unfortunately, some beneficiaries find themselves in a situation where they haven't received the money they were left in a will.
Our People - Andrew Guile
The primary duty of an executor is to carry out the wishes of the deceased, include locating the original will, sorting out finances and applying for probate.
Our People - Andrew Guile
Most people appoint one or two executors and it’s wise to provide in your will for replacement executors in case one or more of the executors die before you or are unable or unwilling to act as executor after you die.
Our People - Andrew Guile

Send a message

We will only use the information you enter in this form to contact you about your enquiry and will not share it with anyone else. Please read our Privacy Notice.

Please note that we are not accepting any new housing work at this time.