HMRC Does Not See Crypto as Money
Her Majesty’s Revenues and Customs (HMRC) has recently edited its cryptocurrency taxation guidelines for businesses and individuals. Furthermore, the government tax agency released tax guideline updates. It cleared out its stance on the tax of companies and individuals.
The guidelines in which the HMRC set out its view on cryptocurrency transactions, explained how they filed tax returns and accounting practices. Then, they also thought of the taxation of exchange tokens. It stated the rules for utility or security tokens would come out soon.
If a firm buys or sells tokens, mines exchange tokens for other assets or provide goods or services in return for tokens; they are liable to pay one or more kinds of tax. These types of taxes include income tax, corporation tax, capital gains tax, stamp taxes, and national insurance contributions.
Moreover, HMRC indicated that it does not acknowledge any of the current cryptocurrencies to be money or currency.
HMRC also recognized that the crypto sector is a quick-moving one. It will review the facts of every case separately. Then, it will begin to apply the fitted tax provisions based on what has actually taken place – instead of relying on theory alone.
Previously, HMRC believed that cryptocurrency trading is like gambling. However, the recent tax guidance update said that the agency does not consider the buying and selling of cryptos as such.
HMRC Asks for User Data
Now, the HMRC is asking all cryptocurrency exchanges to provide their records of transaction histories and customers’ identities. In addition to that, the agency wants to address the perceived issue of tax evasion on digital asset trading platforms. During that time, sources stated that HMRC only requested records from the past two or three years. This means that it will not affect early investors in the cryptocurrency space.
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