The UK's HMRC Begin Tax Talks for Cryptocurrency
November 2019 has seen newly published guidelines come into place, with Her Majesty’s Revenue and Customs (HMRC) collecting advice and consulting with third parties to create new principles on different taxes in the United Kingdom.
The following taxes have been discussed:
The HMRC believes that all transactions falling under this type of tax will require payment. Usually, this will result in taxpayers paying for any profits made on trades or other chargeable gains. A big difference between the UK tax requirements and the American IRS requirements is that if a hard fork is made, generally, no tax will be payable on receipt of the newly formed cryptocurrency. This would be similar to Bitcoin, forking to Bitcoin Cash, etc.
Any person receiving crypto payment for work or services will be required to pay tax. In the UK, this will mean that National Insurance and Income tax must be paid, following normal employment tax contributions.
There will be no tax payment required. Following the HMRC deciding crypto assets are not stock or securities.
Value-added Tax (VAT) does not require Tax payment from crypto assets. The only requirement is that any good, product or service, pays the VAT as standard.
The UK will want to grow their crypto regulations as they aim to maintain their social status as a financial hub. The following thought leadership is an excellent sign of more to come.
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