British tax authority issued Crypto tax guidelines for businesses on 01 November 2019. That is complementing its previous guidelines for individuals.
04 November 2019, AtoZMarkets – The guidelines clarify how the capital gains tax, national insurance contributions, income tax, corporate tax, and others. In particular, Her Majesty’s Revenue and Customs (HMRC) does not consider cryptocurrencies as currency or shares or securities. That largely exempts these cryptocurrencies from stamp duty. However, tokens used in debt transactions are still subject to stamp duties.
2019 British Crypto Tax Guidelines
The HMRC also requires companies to keep records of cryptocurrency transactions in pounds. And companies also have to keep records of the valuation methodology for these transactions. Companies have to record the amount spent on each type of token.
The new guideline also provides information on how various types of taxes. They are capital gains tax, corporation tax, national insurance contributions, income tax, VAT, and other. That will apply to which deal with cryptocurrency operations.
The guidelines specified that if an enterprise buys and sells exchange tokens, exchanging tokens for other assets or providing goods/services in exchange for tokens. It will most likely have some form of tax. The amount of tax will depend on the company’s income, expenses, profits, and earnings. This information must be provided in the tax return submitted by the company.
The guidelines also stated that each case would be assessed individually. HMRC will consider each case based on its facts and circumstances. And that will apply relevant legislation and case law. That is to determine the correct tax treatment. It is also including, where appropriate, contractual terms governing the exchange tokens.
Earlier HMRC requested customers history
In August, HMRC requested that cryptocurrency exchanges provide the identity and transaction history of customers. The agency aimed to address the perceived problem of tax evasion on digital trading platforms. At the time, HMRC had requested documents only for the last two or three years. That means that the early investors in the field of cryptocurrency would not be affected.
In December 2018, the HMRC released a cryptocurrency tax guideline for individuals. That clarified several tax issues. That is related to airdrops, forks, and mining. The 2018 Guideline also requires individuals to maintain records for each cryptocurrency transaction in pounds.
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