Bitcoin Startup CoinJar Cites Tax as Influence on UK Relocation

Australian bitcoin exchange and payment processor CoinJar is relocating its headquarters to London, citing a more favorable tax environment.

AccessTimeIconDec 1, 2014 at 4:06 p.m. UTC
Updated Sep 11, 2021 at 11:21 a.m. UTC
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Australian bitcoin exchange and payment processor CoinJar has announced it is relocating its headquarters to the UK as of today.

The company's move has been rumored for some time, especially after the Australian Tax Office (ATO) announced in August that bitcoin trades involving Australia-based exchanges would be subject to the 10% Goods and Services Tax (GST).

In a statement posted online, CoinJar described the move as "part of a global expansion that will will provide customers more freedom to buy, sell and use bitcoin as a global digital currency, adding:

"Aside from catalysing CoinJar’s growth, the UK relocation will mean CoinJar customers will no longer be subject to 10 per cent GST (Goods and Services Tax) when they buy bitcoin using our services."

The new entity is officially incorporated as a UK company called CoinJar UK Limited, and is based in London's financial district.

Notably, though, CoinJar promised to maintain a "strong presence" in Australia through its Melbourne office, and said it would continue to play a role in the local community through meetup groups and support for local businesses.

Service redesign

At the same time as its relocation announcement, CoinJar also revealed a redesigned and simplified user interface for its web-based services.

Customers can now see and spend balances in bitcoin, dollars and on the company's own 'Swipe' debit cards on a single page. Funds can be easily transferred between each balance, making the process of buying bitcoin as simple as moving funds from the dollar balance into the bitcoin one.

See the company's explanatory video below:

https://www.youtube.com/watch?v=yoxziWA9BXc

Bitcoin and sales tax

While businesses appreciated the ATO's attention and its legitimization of bitcoin business for tax purposes, the notion of paying GST first to acquire bitcoin and then again when using it to make purchases has been unpopular among bitcoin advocates in Australia.

Singapore's Inland Revenue Authority (IRAS) made a similar ruling in January, with bitcoin businesses there also raising objections.

The UK's tax department, HM Revenue and Customs (HMRC), announced in February it would exclude digital currency trading from its own sales tax, the Value Added Tax (VAT). This ruling has made the UK an enticing location for bitcoin businesses and potentially makes London a hub for bitcoin startup activity.

CoinJar said it couldn't comment on what tax liabilities its Australian customers might still face, and advised them to seek advice from an accountant or tax professional on how its relocation would affect their businesses.

London image via Shutterstock

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