For tax purposes, the authorities treat local money trading in the same way as Sterling. Social exchanges, where something is offered as 'favour' for a friend.
All commercial exchanges are taxable.
LETSystems are not tax avoidance systems and such activities by account-holders are strongly discouraged. The Inland Revenue regards social exchanges as outside the tax system. Account-holders are responsible for their own tax affairs. System administrators are not required to report to the Tax authorities. However, the authorities may access information on a specified account-holder through due legal process.