We know that the importance of Cryptocurrencies and Tax Advice is growing. Interest in cryptocurrencies has increased in the UK over the past few years. As Bitcoin makes headlines, then more people take notice about the ever-developing crypto and blockchain space.
With the growth in this popularity many people have seen the value of their cryptocurrency investments grow. This almost certainly means that if you have invested in crypto, you will probably have recorded some gains. This could mean that you have tax liability.
It’s probably important to take a look at how HMRC view cryptocurrencies
HMRC call cryptocurrencies Cryptoassets (also referred to as ‘tokens’ or ‘cryptocurrency’)
As there are different types of cryptoassets, which work in different ways. it’s probably a good idea to list the main types which include…..
Exchange Tokens
Exchange tokens are intended to be used as a means of payment and are also becoming increasingly popular as an investment due to potential increases in value.
Utility Tokens
Utility tokens provide the holder with access to particular goods or services on a platform. A business or group of businesses will normally issue the tokens and commit to accepting the tokens as payment for the particular goods or services in question. In addition, utility tokens may be traded on exchanges or in peer-to-peer transactions in same way as exchange tokens.
Security Tokens
Security tokens provide the holder of a security token particular rights or interests in a business, such as ownership, repayment of a specific sum of money, or entitlement to a share in future profits.
Stablecoins
Stablecoins are another prominent type of cryptoasset. The premise is that these tokens minimise volatility as they may be pegged to something that is considered to have a stable value such as a fiat currency (government-backed, for example US dollars) or precious metals such as gold.
How HMRC Treats Cryptoassets
The tax treatment of all types of tokens is dependent on the nature and use of the token and not the definition of the token.
It is important for you to note that HMRC does not consider cryptoassets to be currency or money. No matter how much the crypto community suggest otherwise. On its own, owning and using cryptoassets is not illegal in the UK and does not imply tax evasion or any other illegal activities.
The ever changing regulations surrounding the sector, and as a result the need for good cryptocurrency tax advice, will become more important as time goes on. Things change so quickly. The advent of Non-Fungible Tokens (NFTs), crypto lending and staking platforms, not to mention the growth that Bitcoin, Etheruem and and other cryptocurrencies have shown over the past two years means that seeking the best cryptocurrency tax advice is crucial.
The team here at MaxPro keep a watchful eye on the tax regulations affecting digital assets. HMRC are continually updating their guidance, so we keep a close watch on developments so that you don’t have to.
As a result we provide our clients with the most up to date cryptocurrency tax advice available. We are pleased to say that we will remove this tax headache and provide you with all the practical help and advice you need.
Our team also provide a wide range of other tax, accountancy and other related advice services. We are also specialist in several areas which you can see HERE. Not only that amongst our staff we have fluent English, Dari, Farsi, Pashto, Arabic, Urdu and Romanian speakers. This enables us to service the needs of our diverse range of clients in the South London area.
So for your FREE telephone consultation for cryptocurrency tax advice, or other tax and accountancy queries, please get in touch HERE or call 0208 168 1680.