UK Taxation Agency, HMRC, Releases New Crypto Tax Policies, Says Bitcoin is Not Currency
The guidelines for taxing cryptocurrencies were recently updated in the United Kingdom. Her Majesty’s Revenue and Customs (HMRC) who act as the regulator released new guidance at the beginning of November.
Individuals who own and use crypto coins for transactions within the U.K ecosystem will now be subject to taxation as per the new guidelines. The release focused on how crypto transactions should be captured and stakeholders pay taxes within one or more tax brackets. Furthermore, it looks into exchange tokens and noted that they would expand this frame to security and utility tokens in the near future.
The HMRC made it clear that they do not consider cryptocurrencies as a currency or a form of money. Therefore, firms operating within this sphere in areas not limited to crypto mining will be subject to either capital gains, income or corporation tax. Going forward, the regulator is set to lay out detailed guidelines that will ensure the fast-growing crypto space pays taxes accordingly.
In the new release, HMRC no longer considers crypto trading as a form of betting. The regulator now requires crypto businesses to keep proper records of their transactions and the method of valuation as per reporting dates.
Earlier in August, the U.K taxman had requested for clients’ information from crypto exchanges. However, sources say that they only wanted 2-3 years of transaction histories which meant they would miss a lot of data from early crypto entrants. Prior to the recent release, the 2018 guidelines had given direction on issues mining, forks, and airdrops.