Her Majesty the Queen Rules Out Crypto as Currency
Or Lokay Cohen's original article for cointelegraph.com reduced by 60%
Only a few weeks after the United States Internal Revenue Service published new guidance for crypto taxation, the United Kingdom's tax, payments and customs authority, Her Majesty's Revenue and Customs, has updated its cryptocurrency taxation policy paper for businesses and individuals. The policy paper on individuals considers crypto activity as a personal investment subject to capital gains tax that should be paid when crypto is sold for fiat, using crypto to pay for goods or services, gifting crypto or - unlike the position of the French tax authority - exchanging crypto for crypto. Capital gains tax is commonly used to tax crypto activity in many countries, such as the U.S.
and Israel. In cases where the individual did not sell immediately and was awarded crypto, they will be subject to capital gains tax when that crypto is sold or exchanged. If you are paying income tax on crypto activities, you may also offset your losses from trades against future profits or other income.
Any goods or services sold in exchange for crypto tokens are subject to VAT.With that being said, the HMRC decided that under the Value Added Tax Act 1994, financial services supplied by crypto exchanges or any services required to exchange tokens are exempt from VAT.Companies paying salaries in crypto are subject to income tax and national insurance contributions on the value of the asset. The HMRC does not consider crypto as a stock or security, and therefore, there will be no stamp duty reserve tax on crypto business activity in the U.K.Without a doubt, 2019 will be marked as the year of crypto tax guidance.
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