HMRC sets out cryptoasset guidance for businesses

HMRC sets out cryptoasset guidance for businesses

06 Nov 2019

HMRC has issued guidance on the tax treatment of cryptoassets in order to clarify the rules for businesses.

The UK tax authority has stressed that it does not consider cryptocurrencies to be either currency, stock or marketable securities. This means that any corporation tax legislation, which relates solely to currency, does not apply to cryptoassets.

However, the guidance makes clear that if a business is carrying out activities that involve exchange tokens, they are liable to pay tax on them. This would include activities such as buying and selling exchange tokens; exchanging tokens for other assets or cryptoassets; 'mining' assets; and providing goods or services in return for exchange tokens.

HMRC notes that the crypto sector is fast developing, and the terminology, types of coins, tokens and transactions can vary. It says it will look at the facts of each case and apply the relevant tax provisions accordingly.

HMRC also requires businesses to keep records of cryptocurrency transactions in pounds sterling, and to keep records of the valuation methodology for these transactions. Firms are expected to record the amount spent on each type of exchange token. 

Late last year, HMRC published cryptocurrency taxation guidance for individuals, clarifying several taxation issues related to airdrops, forks and mining.

Download our TaxApp Today

Tax rates, tips and calculators at your fingertips

Using the latest technology, our App has been developed to provide you with useful tax tools and information via your mobile device. Available for all mobile phones and devices.

Download for FREE now and simply save to your home screen.

The Ollis & Co TaxApp will always be technically up to date and keep you reliably informed.