Bitcoin and other cryptocurrencies – GOV. HM Revenue and Customs tax treatment of income received from Bitcoin and other cryptocurrencies. HM Revenue and Customs tax treatment of income received from Bitcoin and bitcoin tax implications uk cryptocurrencies.
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The advent of cryptocurrencies such as Bitcoin is a new and evolving area and determining their legal and regulatory status is ongoing. Cryptocurrencies have a unique identity and cannot therefore be directly compared to any other form of investment activity or payment mechanism. Bitcoin operates via a peer to peer network, independent of any central authority or bank. All functions such as issue, transaction processing and verification are managed collectively by this network. New Bitcoin is produced when a new block is attached to the chain. A new block can only be added to the chain when the answer to a complex cryptographic algorithm is solved. As well as mining, activities include the buying and selling of Bitcoin and providing exchange facilities for parties to trade Bitcoin with recognised currencies.