A HMRC technical expert sounds very vague, also they (the technical expert) do not have the authority to apply VAT to an item. VAT laws are very proscriptive th

A HMRC technical expert sounds very vague, also they (the technical expert) do not have the authority to apply VAT to an item. VAT laws are very proscriptive that is why when they add VAT (or change the rate) to e.g. hot foods, it is done through the budget by government and not by HMRC. That is why M&S were involved in a long running battle with HMRC over VAT on teacakes (the marshmallow/chocolate kind) or why Jaffa cakes dont have VAT on them (big legal case to prove they are cakes (VAT exempt) and not chocolate biscuits (not VAT exempt). PS. the reason a jaffa cake is vat exempt is because when it goes stale it goes hard (like a cake) whereas a biscuit goes soft. If you are actually concerned about this ask for something in writing that specifically states they are not exempt from VAT and at which rate VAT is applied to them. I am willing to bet that they will not provide an official document that shows VAT is applicable because no offical detrmination has been made. If it had it would have been significant news in the bitcoin world especially amongst UK users.