UK Tax Authority Updates Crypto Rules, Refrains From Recognizing it as Money
Her Majesty’s Revenue and Customs (HMRC) – UK’s tax, payments and customs authority, has amended its guidelines related to crypto taxation for individuals and businesses.
The UK tax authority, which handles taxes along with other financial decisions, published its amended tax rules that additionally clarify its position on how enterprises and individuals associated with cryptocurrency will get taxed.
The regulations establish HMRC’s view on crypto dealings, the list of taxes that apply, filing tax returns and accounting procedures, and so forth.
The tax authority also explores taxation of exchange tokens, while pointing out that guidelines for utility or security tokens will be included in the future.
Enterprises that trade tokens, exchange tokens for various kinds of goods, mine or provide services in exchange for tokens are subject to tax obligation of one or more kind. That includes corporation tax, income tax, stamp taxes, capital gains tax and National Insurance contributions.
Furthermore, HMRC categorically points out that it does not recognize the prevailing cryptocurrencies as money or currency. HMRC underlined that crypto sector upgrades itself very quickly and therefore it is wise to look at each and every scenario separately, incorporate appropriate tax provisions as per the developments instead of depending on theory alone.
Earlier, HMRC had categorized cryptocurrency trading as a form of gambling. Nevertheless, the recent amendment on tax regulations states that the agency no longer considers buying and selling of cryptos in that manner.
Back in August, HMRC demanded cryptocurrency exchanges to send details regarding customers, including identities and transaction history.
The organization intended to resolve the rising issue of tax evasion by crypto currency traders. At that time, unnamed sources that are well aware of the issue stated that HMRC only asked for past 2-3 year trading records, implying that early investors in the crypto domain will not face scrutiny.