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How is this not tax-avoidance? (inadvertent and well-meant, I'm sure) They're not paying VAT on any of these transactions. I would have thought HMRC would come

• aries1980 11y ago
  The currency does not change the law. E.g. if you pay with EUR or USD you still have to pay the appropriate taxes in the format the govn't expects (in sterling). The alternative currencies are no exception.
  • tow21 11y ago
    I agree. But if money is going through normal channels and normal currencies, then it's recorded & HMRC can audit it. If it's going through back-channels, alternative currencies & bitcoins, it's still taxable, but HMRC can't see it so there's a huge temptation to not pay tax. There's a reason your plumber offers you a discount for cash-in-hand :-) if it doesn't go through his books he's not going to pay tax on it. That happens with GBP already - surely more likely to with Bristol Pounds!
    • deleted 11y ago
      [deleted]
    • aries1980 11y ago
      As you described, the issue is the nature of the transaction and not the currency. In mainland Europe, some banks offer accounts in alternative currencies. The only caveat is you can't use it outside the region or country, but this is the purpose of the alternative currencies, to keep and circulate the value inside the region.
• jackgavigan 11y ago
  > They're not paying VAT on any of these transactions. They're supposed to. Well, more accurately, if a VAT-registered company is receiving payment in Bristol Pounds, they should be charging VAT (and passing it on to HMRC as the Sterling equivalent). Don't forget that VAT is only charged by companies that are VAT-registered, and you don't have to register for VAT unless your turnover is above £82,000.