UK taxes BTCC

The UK tax authority will make a new crypto announcement next week

HM Revenue & Customs, the UK tax authority, will publish new guidance on taxing cryptocurrencies next week.

The update, which will take place on March 30, will merge two existing sections of crypto tax guidance into a single “crypto handbook”, according to people with knowledge of the situation. They said the move is an attempt to provide further guidance on “future proof”, which they say could be updated several times over the next year.

Similar sources are also expecting new guidance from the tax authority on profits made by lending cryptocurrencies – something startups like BlockFi are increasingly popular with – and on staking, through which owners Owning a cryptocurrency earns a reward for helping maintain the proof-of-stake blockchain.

In a statement to The Block, an HMRC spokesperson confirmed that they will soon publish “a new internal guide” with guidance on crypto taxation.

“The Guide demonstrates our commitment to providing clarity to our customers and will help individuals and businesses understand the tax consequences of different types of transactions in crypto assets. . This builds on previously published policy documents and will provide a more flexible approach to customer updates in this fast-moving field. ”

So far, HMRC has published two separate documents offering crypto tax advice on its website – one for individuals and the other for businesses. The guide was last updated in December 2019.

Mr. Nimesh Shah, CEO of tax consulting firm Blick Rothenberg, told The Block that the driving force of the most recent guidance is that “for the majority of people, profits from cryptocurrencies will be seen as profit. capital ”- rate 20%. However, those who actively trade cryptocurrencies will be subject to a higher income tax of 40% or 45%.

HMRC’s 2019 guidelines also state that individuals will be responsible for paying income taxes and national insurance contributions to cryptocurrencies received from employers in the form of payments or through mining, transaction confirmation or airdrop.

The cryptocurrency sector has changed dramatically since then.

One area the insiders expect to address in the coming months is decentralized finance, a market that has grown significantly over the past year or so. DeFi Pulse, an analytics website, found that the value of the DeFi space has increased from about $ 650 million this time last year to about $ 40 billion today.

In addition to the rise of DeFi and even more recently irreplaceable tokens (NFT), prices in the crypto sector have skyrocketed over the past six months – with bitcoin hitting an all-time high of around $ 60,000 in early March.

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