Britain’s Tax Authority Updates Crypto Guidelines

Britain’s Tax Authority Updates Crypto Guidelines
фото показано с : news.bitcoin.com

2019-11-5 01:00

Her Majesty’s Revenue and Customs (HMRC) has updated its guidelines on the taxation of transactions involving crypto assets. The United Kingdom’s tax authority clarifies its stance on cryptocurrencies and explains which taxes apply to specific activities carried out by business entities and private individuals.

Also read: Bad Loans at Big British Banks Jump Over 50% in a Year

Taxable Activities Listed

Multiple tax tools now exist to help crypto users and businesses from the industry with tax reporting. But in a field as fluid as the crypto space, regulations change rapidly. On Nov. 1, HMRC published updated policy papers concerning crypto transactions undertaken by companies, other businesses such as sole traders and partnerships, and individuals.

The agency notes that the documents deal with the tax treatment of “exchange tokens,” explicitly mentioning bitcoin. They do not apply to tokens issued in initial coin offerings (ICOs). The taxation of security and utility tokens will be addressed separately in the future. Taking into account the specifics of the fast-changing industry, HMRC says it will look at each case and apply the relevant provisions.

The tax office has listed a number of crypto-related activities that give rise to tax obligations. These include buying, selling and exchanging tokens for other assets, including cryptocurrencies. Crypto mining has been mentioned as a taxable economic activity. Businesses providing goods or services in return for digital coins also owe taxes to the British government.

The guidelines review the applicable taxes as well and corporate entities conducting any of the aforementioned activities are likely to be liable to pay one or more of the following taxes: capital gains tax, corporation tax, income tax, value added tax (VAT), and stamp taxes. National Insurance contributions are also due.

Private individuals will be liable to pay capital gains tax when they sell crypto assets that have been acquired as a personal investment, or income tax and National Insurance contributions on coins they receive from employers, mining or airdrops. Traders may reduce their income tax liability by offsetting losses against future profits. The amount paid for an asset is considered a cost that can be allowed as a deduction. The loss of a private key, however, does not count as a disposal of the assets for capital gains tax purposes. Victims of theft cannot claim a loss either.

Cryptocurrency Not Money

HMRC addresses other important aspects of taxation concerning crypto-related transactions. The authority emphasizes that taxable profits, and losses respectively, should be calculated and reported in British pounds on tax returns filed by companies and individuals. In case a transaction does not involve GBP, an “appropriate exchange rate” must be established in order to convert the transaction to fiat.

The agency does not explain clearly what it would consider an ‘appropriate’ valuation but stresses that a “consistent methodology” should be used. The papers further emphasize that profits from a crypto trade must be calculated in accordance with either the U.K. generally accepted accounting practice (UK GAAP) or in accordance with international accounting standards (IAS).

The requirement to keep records in fiat equivalent has to do with the tax department’s current stance on decentralized cryptocurrencies. “It is important to note that HMRC does not consider any of the current types of cryptoassets to be money or currency. This means that any Corporation Tax legislation which relates solely to money or currency does not apply to exchange tokens or other types of cryptoasset,” the administration points out.

However, the tax regulator remarks that “if an employer ‘pays’ exchange tokens as earnings to an employee, those exchange tokens count as ‘money’s worth’.” In other words, crypto salaries paid in the United Kingdom are subject to income tax and National Insurance contributions on the fiat value of the cryptocurrency used for remuneration.

What’s your opinion about the updated guidelines regarding crypto taxation in the U.K.? Tell us what you think in the comments section below.

Images courtesy of Shutterstock.

Do you need a reliable bitcoin mobile wallet to send, receive, and store your coins? Download one for free from us and then head to our Purchase Bitcoin page where you can quickly buy bitcoin with a credit card.

The post Britain’s Tax Authority Updates Crypto Guidelines appeared first on Bitcoin News.

Similar to Notcoin - Blum - Airdrops In 2024

origin »

Emerald Crypto (EMD) на Currencies.ru

$ 0 (+0.00%)
Объем 24H $0
Изменеия 24h: 0.00 %, 7d: 4.67 %
Cегодня L: $0 - H: $0
Капитализация $0 Rank 99999
Цена в час новости $ 0.0413084 (-100%)

guidelines crypto tax authority updates britain out

guidelines crypto → Результатов: 126


IRS’s treatment of fork, airdropped coins as income prompts debate

“.. if I could have one word that would just be to describe this whole guideline will be just whack, I mean, they’re just not thinking about what their guideline means,” said Brandon Green, Project Manager for BTC Inc while talking about the recently released guidelines and clarifications about its crypto tax policy by the […] The post IRS’s treatment of fork, airdropped coins as income prompts debate appeared first on AMBCrypto.

2019-10-14 01:30


Japan’s FSA Drafts Supervision Guidelines to Advise Funds Who are Investing into CryptoAssets

Japan’s Financial Services Agency (FSA) has published draft guidelines for funds investing in cryptocurrencies. Japan is years ahead of the majority of the nations in the crypto game since they realized the potential in crypto back in 2017 and even legalized it for the public use. To give you a perspective, most of the so-called […]

2019-10-4 18:20


Binance to tackle FATF regulation and compliance with Coinfirm partnership

Binance, the world’s leading exchange in terms of driving crypto innovation, has bagged another partnership with regulation technology company Coinfirm. As per the official blog post, “Binance and Coinfirm announced their partnership to address the recently issued guidelines on anti-money laundering (AML) rules by the Financial Action Task Force (FATF).

2019-10-4 21:25


Фото:

Small Nations Attracting Crypto Startups with Amenable Regulations 

While large nations like the United States, the United Kingdom, and others are still sitting on the fence in terms of cryptocurrency regulations, smaller nations such as Malta, Belarus, Bahrain, and others have implemented clear cut guidelines for bitcoin-linked businesses, making these regions a hotbed for startups, reports Reuters on July 29, 2019.

2019-7-30 23:00


Regulators Give Thumbs Up To Non-Custodial Exchanges

Cryptocurrency exchanges are navigating uncharted waters, but new regulatory guidelines could help these businesses reach land. The two leading U. S. regulators, the SEC and Financial Industry Regulatory Authority (FINRA), have released a joint statement on broker-dealer obligations for digital assets, clarifying some of the rules that apply to cryptocurrency exchanges.

2019-7-10 20:26


U.S Treasury Secretary: Crypto exchanges and service providers MUST register with FinCEN

The Financial Action Task Force [FATF], an inter-governmental body that includes the most influential countries in the world such as the United States, Russia, China, United Kingdom, and Germany, has taken the first step towards providing better regulatory clarity that was much sought after by several businesses in the cryptocurrency space.

2019-6-21 21:14


FATF Meets To Finalize Common Cryptocurrency Guidelines For G-20 Nations

The FATF Meet To Finalize The Common Crypto Guidelines For G-20 Nations The Financial Action Task Force (FATF) has finally kicked off the meeting to finalize the final draft of the global crypto regulation guidebook, which the participating G-20 nations have assured to implement in their system. Some of the recommendations put forward by the […]

2019-6-19 19:30


Crypto Institutional Adoption: New FATF Guidelines Could Be A Major Blockade

Cryptocurrencies have scaled so many blockades since the emergence of the first blockchain output, Bitcoin. In the past couple of years, digital currencies are beginning to gain more ground in acceptance and awareness, but stern prying by the government and financial regulatory authorities may hinder the free advancement and institutional adoption.

2019-6-13 00:07