Accountants specialising in cryptocurrency UK
Cryptocurrency accountants help with your tax planning, tax treatment, and other matters related to cryptocurrencies. They will do everything from helping you report the gains from your investments to filing the paperwork for capital gains taxes. They’ll also ensure that you comply with all current laws, so you don’t run afoul of the HMRC.
Also, they’ll make sure that all of your records are organised and easy to access so that if there is ever an audit or investigation into your records, they will be able to provide every piece of information required by law.
What is the difference between cryptocurrency and crypto assets?
Cryptocurrency and crypto assets are two terms that are often used interchangeably, but there’s a difference between the two.
Cryptocurrency refers specifically to digital currencies that are based on blockchain technology. The name comes from cryptography because it is secured through cryptographic techniques.
Cryptocurrency uses encryption to maintain security, privacy, and anonymity in transactions. They are not controlled by any central entity and can be used as a medium of exchange or as a store of value.
Cryptoassets, on the other hand, are a subset of cryptocurrencies that have some other utility beyond being used as a means of payment. They are traded on the open market, and their prices can go up and down like stocks.
Cryptoassets use blockchain technology to track ownership rights and enable direct transfers between individuals and businesses without the need for intermediaries or centralised institutions like banks and governments.
The most famous example of this is Ethereum, which was created as a platform for developers to build decentralised applications (dApps). To use Ethereum, you need to own Ether tokens.
Do I need to report cryptocurrency and crypto assets on my taxes?
The short answer is yes. You need to report crypto assets and cryptocurrencies on your taxes. This is because tax authorities have determined that crypto assets are still assets in the eyes of the law, so they are considered property by default.
It’s a capital gain when you sell a cryptocurrency or crypto asset for more than it costs. In other words, you have to pay capital gains tax on any profits made from selling cryptocurrencies and crypto assets.
If your business is trading in cryptocurrencies and crypto assets, you must pay corporation tax on any profits made from those trades.
Income tax return
And if you’re an employee who receives income from trading crypto assets, this income needs to be reported in your annual income tax return. You also have to pay VAT when you buy things with these assets.
In addition to cryptocurrency tax, there are also stamp taxes, capital gains taxes and National Insurance payments that may apply. You can find out more about these in the HMRC manual.
If you don’t report your gains from selling or trading cryptocurrencies, or any other form of crypto asset, you could face serious penalties.
If this sounds overwhelming, don’t worry! We’ve got everything covered here at WIS Accountancy. We believe in effective tax planning. Our team of chartered tax advisers will help you understand your tax obligations, plan for them, and ensure they get done on time.
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How are cryptocurrencies taxed?
There are two ways your gains from cryptocurrencies could be taxed: income tax or capital gains tax (CGT). Depending on your income bracket, capital gains are taxed at different rates – 10% or 20%.
If your income is over £50,279/year, you’ll be in the higher-rate band and pay 20% tax on any capital gains. And if your income is less than £50,270/year, you’ll be in the lower-rate band and pay 10% tax on any capital gains. If you make £1,000 by trading in BTC, for example, you will only pay £100 in capital gains tax on the profit.
How are crypto assets taxed?
HMRC treats crypto assets as either trading income or miscellaneous income. If the crypto asset is received in exchange for providing goods or services, it will be treated as trading income and taxed under the standard rules for trading profits.
Suppose the crypto asset is received in exchange for holding on to it without providing any further service. In that case, HMRC will treat it as miscellaneous income, subject to self-assessment tax at your usual income tax rate.
When do I need to submit my crypto income for tax returns?
In the UK, the tax year runs from April 6th to April 5th. If you make money in crypto during the year, you need to declare it for tax purposes as part of your annual tax return.
The current tax year is 2022/2023, and it started on April 6th 2022. You have until April 5th 2023, to submit your crypto income for tax return on a self-assessment form.
Frequently Asked Questions - Cryptocurrency Accountants
Why choose WIS as your crypto accountant in the UK?
When you work with WIS, you get access to a team of accountants and cryptocurrency tax advisers who have been working with cryptocurrency since its inception.
Our team of chartered tax advisers has extensive experience in handling all types of crypto-related transactions and can help you navigate the complex world of cryptocurrency taxation.
We’ll ensure that you’re compliant with HMRC regulations and getting the best tax treatment possible. But we’re not just any crypto service, we’re a Koinly partner, which means we work with some of the most innovative companies to offer top-of-the-line services.
Our services are tailored to fit any business model, from start-ups to established enterprises, and we follow international accounting standards while also providing a bespoke approach to each client.
We’d love to hear from you. Call us at 0203 011 1898 to schedule a free consultation!