All over the world, there are repeated calls for the regulation and creation of proper guidelines for the crypto sector. The United Kingdom has recently followed suit and added updates to its current rules for cryptocurrency. Her Majesty’s Revenue and Customs (HMRC), the U.K’s tax and customs authority, has published guidelines on the country’s approach to taxing these assets. According to the agency, cryptocurrencies are not money, and will not be regarded as money.
Basically, the HMRC has specified exactly how individuals as well as business which hold cryptocurrency will be taxed, including the proper way to file their tax returns in each case and which exact taxes would apply among other guidelines. The guidelines however exclude any “tokens under initial coin offerings or other similar events.”
Furthermore, the different types of taxes include stamp tax, corporation tax, income tax, capital gains tax and also National Insurance contributions. The guidelines also suggest that the need for these updates was borne out of the crypto sector’s fast-moving nature and the fact that it is developing all the time. It further states that since this development differ especially with regard to the terminology, tokens, transactions and the types of coins, the “HMRC will look at the facts of each case and apply the relevant tax provisions according to what has actually taken place (rather than by reference to terminology).”
Back in August, the HRMC officially reached out to three major crypto exchanges including Coinbase, eToro and CEX.io, requesting for specific data as part of its fight against tax evasion.
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