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

Probate without a will, also known as intestacy, presents a unique set of challenges in the UK's legal landscape. When an individual passes away without a will, the distribution of their estate is governed by specific rules, and the process involves obtaining a Grant of Letters of Administration.
Our People - Andrew Guile
When it comes to making important decisions about healthcare and personal matters, individuals have legal tools at their disposal to ensure their wishes are honoured. Two commonly used instruments are the Living Will and the Lasting Power of Attorney. Although both serve similar purposes, they differ in significant ways.
Our People - Chryso Loizides
In this article, we will discuss the differences between updating your will and adding a codicil and which option may be best for you.
Our People - Chryso Loizides
Probate can be a complex and time-consuming process, especially if the estate is large or has multiple beneficiaries. A probate solicitor can help guide you through the probate process and ensure that everything is handled correctly.
Our People - Andrew Guile
If you’re dealing with an estate which includes a house, flat or land which is to be sold or transferred, you are likely to need a grant of representation (probate, or letters of administration) to complete the transfer or sale.
Our People - Andrew Guile
An administrator of an estate is the person who looks after the probate process including valuing the estate, paying any inheritance tax due, applying for probate, collecting the assets and distributing the assets to the beneficiaries.
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.