Regulatory Series on Cryptocurrencies: UK Tax Authority (HMRC) Comes-up With Cryptocurrency Tax Norms

The British tax, payments and customs authority, Her Majesty’s Revenue and Customs (HMRC), has updated its cryptocurrency taxation guidelines for businesses and individuals.

The U.K. government tax agency who administers taxes in conjunction with the fiscal policy making, have recently updated the tax guidance.

Furthermore, they shed some light on how the tax-assesses are involved during the cryptocurrency tax treatment, and also, those who transact in tokens, mine, exchange tokens for other assets or provide goods or services in return for tokens are liable to pay for one or more different types of tax. Those taxes include income tax, corporation tax, capital gains tax, stamp taxes and National Insurance contributions.

Evers since the idea of cryptocurrency derivatives have been the centre of attraction from the recent past, the UK regulatory authorities, such as, UK’s Financial Conduct Authority (FCA) have been meticulously scanning the entire crypto-space. 

As per the sources of FCA, back in March 2018, the UK government enforced the Crypto-Assets Task-Force (CATF), consisting of HM Treasury, the Financial Conduct Authority (FCA) and the Bank of England, who issued a report in October 2018 that led to further investigation and consideration of banning the sale of products pertaining cryptocurrencies to retail consumers to prevent “harm from potentially sudden and unexpected losses”.

For now, HMRC’s approaches on cryptocurrency transactions come under the purview of taxation is emphasized by the updated guidelines, such as, filing of tax returns and accounting practices, the rationale for the tax treatment, and the taxation of exchange tokens.