British Tax Authority
British Tax Authority Updates Cryptocurrency Guidelines
November 4, 2019
British Tax Authority
British Tax Authority Updates Cryptocurrency Guidelines
November 4, 2019

Her Majesty’s Revenue and Customs (HMRC), the United Kingdom’s tax, payments, and customs authority, has updated its cryptocurrency taxation guidelines for businesses and individuals.

On November 1, the U.K. Government Tax Agency, which manages taxes alongside other financial policies, released tax guidance updates that further clarify its stance on how businesses and individuals involved with cryptocurrency will be taxed.  

However, the guidelines set out HMRC’s view on cryptocurrency transactions, which taxes apply, how to file tax returns and accounting practices, among others. It also considers the taxation of exchange tokens, while stating that rules for utility or security tokens will be added in the future.

Companies that buy or sell tokens, mine, exchange tokens for other assets or provide goods or services in return for tokens are liable to pay for one or more different types of tax. Those taxes include income tax, corporation tax, capital gains tax, stamp taxes, and National Insurance contributions. 

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Similarly, the tax authority explicitly stated that it does not consider any of the current types of cryptocurrencies to be money or currency.

HMRC further recognized that the cryptocurrency sector is a fast-moving one and it will look at the facts of each case separately and apply the relevant tax provisions according to what has actually taken place, rather than by relying on theory alone.

Previously, HMRC had considered cryptocurrency trading to be the same as gambling. However, the latest tax guidance update states that the agency does not consider the buying and selling of cryptocurrencies as such.

In August 2019, HMRC requested that cryptocurrency exchanges provide it with records of customers’ identities and transaction histories. The agency aimed to address the perceived problem of tax evasion on digital asset trading platforms.

Thus, at the same time, sources familiar with the matter said that HMRC only requested records from the last two to three years, meaning that early investors in the cryptocurrency space would not be affected.

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Source: cointelegraph.com


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Ishita Bora

Ishita Bora is a Senior Content Creator at Digital Notice Media Labs. She has completed her Master's Degree in Language and Linguistics in 2019 from Gauhati University, India. She is an archetypal writer, who loves to create her own little world with words and locutions. Apart from this, her interest lies in blockchain technology and cryptocurrency space, as she loves writing about blockchain and other blockchain-related articles. Currently, she is working on blockchain-based news, reviews, featured articles, and guides.
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