Until recently, the United Kingdom’s HMRC (Her Majesty’s Revenue and Customs) classified Bitcoins as a type of taxable voucher. This meant that Bitcoins were subject to VAT (Value Added Tax – a type of sales tax used across Europe). As a result, anyone selling Bitcoins in the UK would have to charge a 20% markup to cover the VAT, making UK Bitcoin exchanges extremely unattractive.
However, Tom Robinson from BitPrice, entrepreneur Michael Parsons, Marc Warne from BittyLicious, and Eitan Jankelewitz from Sheridans met with HMRC today to discuss Bitcoin and how the cryptocurrency works.
To quote Robinson:
“We started off by explaining bitcoin to them – a lot of the meeting involved educating them about bitcoin and what it’s actually used for.”
Clearly, this meeting was a success because HMRC said it would no longer classify Bitcoin as a taxable voucher. This means that Bitcoin will no longer be subject to the 20% markup due to VAT, which will definitely galvanise exchanges in the UK. BittyLicious’s Marc Warne was considering moving his company offshore due to the markup, but this will no longer be necessary.
At the end of the day, this is another example of how educating the public about Bitcoin will make it a more accessible and legitimate currency.