The tax authority in the United Kingdom, HM Revenue and Customs, will not accept cryptocurrency as payment any time soon.
Lord Michael Bates, a minister of state, addressed the question of digital currency payment in a written response to a question from a member of Parliament, Lord Jonathan Harris. Lord Bates wrote:
“HM Revenue and Customs does not offer digital currencies as a payment method and has no current plans to do so.”
Profits made on speculation in cryptocurrency “are currently chargeable at the normal Capital Gains Tax rates, depending on the facts of the case,” Bates wrote in response to a separate question from Lord Harris.
Those gains could be considerable. Bitcoin alone has made a 10X return since the end of last year, including briefly crossing the psychological threshold of $10,000 this week. At press time, bitcoin is trading at £6,992.34.
Lord Harris asked several other questions concerning cryptocurrency regulation. In response to one of them, Lord Bates said that the government plans to bring wallet providers and exchanges under anti-money-laundering rules, pending amendments to a European Union directive. Negotiations over those amendments should wrap up by early next year, he told Lord Harris.
“This will require such firms to conduct due diligence upon their customers, with their activities being overseen by national competent authorities for these areas,” Bates wrote.
And in answering Lord Harris’ question about U.K. banks’ reluctance to provide accounts to digital currency firms and their employees – a problem faced by startups in the space for years – Bates offered little encouragement.
“The stance of individual firms towards providers of digital currencies is a commercial decision for those firms, and it would not be appropriate for the Government to intervene,” he wrote.
Parliament image via Shutterstock.
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