The HMRC (Her Majesty Revenue and Customs), which is the United Kingdom’s tax, payments, and customs authority, has revised its tax code for cryptocurrency activities.
On the 1st of November, the tax agency of the UK, which is responsible for taxes as well as other financial operations, revised its tax code to define its position on how it will tax businesses and individuals dealing in cryptocurrency.
HMRC Doesn’t Recognize Cryptocurrency as Money
The revised code defined the HMRC’s position on cryptocurrency transactions (that are taxable) how tax returns and accounting practices should be filed and some other matters. It also put the taxation of coins into consideration, saying that codes for security coins will be addressed at a different time.
Normally, entities that trade or mine coins for other assets or receive payment with coins for goods or services rendered, are accountable to pay for one or more of the various kinds of taxes. These taxes consist of income tax, corporation tax, capital gain tax and a host of others.
However, the tax authority has noted that it doesn’t deem the present kinds of cryptocurrencies as money or currency.
The HMRC also acknowledged that the cryptocurrency space is fast-paced and as such, it will revise the information of each case individually and assign the appropriate tax code based on what transpires instead of going by theory alone.
The regulatory agency used to classify cryptocurrency trading as gambling. However, the revised tax code notes that the agency doesn’t see cryptocurrencies like that anymore.
HMRC Orders for the Provision of all Transactions History
The HMRC has ordered that cryptocurrency exchanges render all the records of users’ information and the history of all transactions. The agency is aiming to deal with issues of tax evasion on cryptocurrency platforms.
It has been speculated that the HMRC has only ordered for the rendering of records from the last 2 to 3 years with means that pioneering members are exempted from the scrutiny.
Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.