The United Kingdom’s authority on taxes, Her Majesty’s Revenue and Customs (HMRC), has released new policies for cryptocurrencies. In the latest crypto asset taxation guidelines for investors and businesses, the tax authority has said that Bitcoin is neither a currency nor money.
According to the new guidelines, individuals who own and use crypto coins for transactions within the UK monetary ecosystem will now be subject to taxation as per the new guidelines. The guidelines for taxing cryptocurrencies were recently updated in the United Kingdom. HMRC which acts as the regulator released new guidelines at the beginning of November.
The release focused on how crypto transactions would be captured and how stakeholders would have to 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 shortly.
The HMRC made it clear that they do not consider cryptocurrency as currency or forms of money. Therefore, firms operating within this sphere (not just 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. Before the recent release, the 2018 guidelines had given direction on issues mining, forks, and airdrops.