UK Tax Office Classifies Cryptocurrency
The Majesty’s Revenue and Customs Agency in the United Kingdom officially have HMRC Classifies Cryptocurrency. This classification came on November 1st, revealing new legislation for both businesses and individual traders as well. The classification also noted new guidelines that determine cryptocurrencies to be neither money nor currency, meaning that it isn’t a viable product for stock markets in the United Kingdom. The official guidelines from the HMRC now place brokers, traders and investors in a unique position with yearly taxations. It’s now estimated that the Majesty Revenue and Customs Agency will implement the stamp tax against all cryptocurrencies.
The guidelines detail the designation of cryptocurrencies, noting that most digital assets will be exempted from the stamp tax. It will only be implemented in certain instances when exchanged tokens are taken as stocked or marketed securities. These chargeable securities would fall under the Stamp Duty Reserve Tax, which will be reviewed case by case. Nature and characteristics will be taken into accountability before traders, investors or brokerages are taxed.
These new classification laws implemented by the UK Tax Revenue Agency also details information on Corporate Tax, Capital Gains, National Insurance Contributions, VAT and Income Tax. Individuals or corporations that are purchasing and selling exchange tokens for services or goods will be required to pay a small tax. The amount that is taxed will be determined by the business’s income, yearly gains and expenditures. All firms operating in the United Kingdom will now have to provide this data to the Majesty’s Revenue Customs Agency going forward in 2020.
Case Reviews Explained
These guidelines re-affirm to readers multiple times that cases will be reviewed case by case. This means that the HMRC Classifies Cryptocurrency will examine claims based on the circumstances and facts regarding their taxes. Relevant legislation and guidelines permitting to those circumstances will be implemented. Subsequently, UK Citizens trading or maintaining a firm will receive fair treatment with taxation.
The Majesty Revenue and Customs Agency have expressed publicly through the guidelines that for their agents to review cases appropriately, it’s required that the crypto transactions made by traders or firms be recorded. This extends to their valuation methodologies and personal income of management. Before these updated guidelines, brokers were guided to record their airdrops and forks. However, the new guidelines that dropped that stipulation going forward. All cases will be handled by local adjudicators that have worked with the HMRC for multiple years.