It is that time of year many a self-employed person dreads, the deadline to submit your tax return and pay anything you owe. But this year there is a question a select few should be asking themselves – have I profited from my investment in crypto-currencies?
If you have, you could be liable for tax.
In 2014 Revenue & Customs published guidelines making clear the different taxes that apply to any earnings from crypto-currencies.
For most people who have bought a few bitcoins some years ago, it is Capital Gains Tax that will be relevant.
This will apply to any profits, once you hit the £11,300 CGT threshold, not just if they are converted into a standard currency but if they are used to buy other crypto-currencies such as Ethereum or to invest in initial coin offerings (ICOs).
But in recent weeks there is some evidence that a few people are making trading in crypto-currencies a full-time job, in which case they are likely to be liable for income tax on their earnings.
Now, the acceleration in the value of Bitcoin and other crypto-currencies happened over the course of 2017 so it is unlikely many people will have incurred tax liabilities in 2016-17, the year HMRC is currently examining.
But over recent months there has been a flood of Bitcoin money heading into everything from ICOs to property – so next year there should in theory be a big boost for the government’s Capital Gains Tax receipts…
Read Full: Bitcoin – the Revenue comes calling