- 7th November 2019
- Posted by: Suzy Hill
- Category: Business News
HMRC sets out cryptoasset guidance for businesses
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.