UK Tax with Bitcoin


#42

Have people seen @peter 's youtube video from yesterday?

I thought it’s still considered gambling in the UK?
I mean, everyone who is investing in crypto in the UK is a ‘gambler’ right??? So no taxes, huh?


#43

Sure! Great video… but he was winking at the camera all the way through like Roger Moore used to in his James Bond movies…


#44

Tell you a little story from experience. Tax loop holes in the UK have come under very close scrutiny by HMRC in recent years. In the past you could use a loop hole and you would get away with your tax advantage until the point HMRC would take it to court which would take years. The court ruling at that point would then determine if the tax avoidance scheme was valid or not.

In the last few years, HMRC now have the power under certain circumstances to demand your tax advantage and apply it in retrospect to any scheme you may have been apart of. They can demand payment of the disputed tax and you will have to wait until a court hearing to determine the validity of the scheme (loop hole) before you get your money back. This is called an APN or advanced payment notification. You can google this outrageous “guilty until proven innocent” precedent HMRC have been able to set for more info.

In short, just because something is a grey area or loop hole does not mean you will not pay the tax they think you owe them even before it has been determined by a court of law.

So, my advice would be this. Never spend the money you might one day owe in taxes or you might just end up in an extremely compromised position including being detained at her majesty’s pleasure if you have no way to pay it.

The point I make here is that the legislation in the uk regarding trading crypto is woefully inadequate but you should expect them to take a similar route to our cousins in USA and they can quite easily apply any new legislation in retrospect to your previous trades.

Of course, nobody here can tell you how to run your financial affairs but my advice would be to air on the side of caution. Keep personal records of each of your trades and keep in mind that each trade may well be considered a taxable event in the future.


#45

Say… Any members of TheBitcoin.Pub who happen to work for HMRC?? :face_with_monocle:


#46

Very wise words and your right they can come back to collect so don’t spend it. You know they will come because they need money more than ever and the returns are to big to go unnoticed


#47

Here is a quick rundown of a scheme I was advised on several years ago which was tax avoidance based spread betting (gambling) for which HMRC issued APNs.

I don’t mean to scaremonger or be a negative nelly. I just want to give you my brothers and sister advice based on my own dealings and keep you out of financial grief.

By all means make the most of these gray areas, just please don’t spend anything you may potentially owe to revenues and customs!


#48

Remember. You’re a gambler.


#49

Up to u mate u can take ur chances but I will be paying tax and hopefully they will spend it wisely which they never do. Just know that HMRC can back date taxes so it might come back to bite u.good luck :+1:


#50

I am thinking of changing my name to ‘Amazon Starbuck’ seems to work for them by hardly paying any tax ! :rage:

There is also this guide https://cryptotax.uk/guide


#51

will take a look, thanks!


#52

But will you get taxed if you transfer it back into fiat? if it stays in the crypto world then you will not get taxed, is that correct?


#53

That is true when and how do you get taxed on that?


#54

As capital gains - it’s still a murky area… you can in theory spend that crypto for goods and the lovely tax-man would never have gotten his share. It’s bound to change. Stay legal, keep records, don’t immediately spend any of your gains if you convert to fiat.

Okay… i think i’m in the clear now if any HMRC agents are watching this thread :sunglasses: :doge:


#55

But you can only pay tax in GBP, you cant really pay tax in any other currency. So if it stays in the crypto world, there is no tax payable. And if you buy and sell different crypto currencies then you still cant be taxed because its not in GBP…if there is any HMRC agents, could they please clarify…lol


#56

But you can only pay tax in GBP, you cant really pay tax in any other currency. So if it stays in the crypto world, there is no tax payable. And if you buy and sell different crypto currencies then you still cant be taxed because its not in GBP…if there is any HMRC agents, could they please clarify…lol


#57

Gents,

Agree with a couple of points - do not put yourself in any position where you are at risk of HMRC requiring you to sell your house or major asset to pay the bill. Very unwise.

Do not convert any coin to fiat if you don’t need to. Keep to your allotted capital gains limit and give some to your wife to take advantage of her capital gains limit, currently in the region of 11,300 for an individual.

Consider you are gambling and there is no capital gains on gambling. Until HMRC are willing to offset losses made against your tax bill its a bit difficult to qualify this only in one direction. If they are not then I would consider this to be stealing on their part.

I don’t work for HMRC. I am a gambler and I am ok!!! :wink:

Crash


#58

For now, in the UK you will pay tax on your capital gains only. The clearest definition of this grey area can be considered as you described it. i.e. when you realise those gains by exchanging them for fiat currency or goods. The recent tax bill passed in America makes every trade of crypto to crypto a taxable event. It’s a nightmare for them.

It’s quite possible HMRC could do the same in the future and in a worse case scenario they could apply that retrospectively which is why it’s important to keep records.

Govt. taxation is based on a depreciating fiat system that is failing. As such, they are not just broke, but horrendously in debt. They will do anything and everything in their power to recover their taxes by any means possible.

To make my position clear, I don’t advocate offering to pay taxes when there’s a grey area. I only suggest covering your ass and keeping said ass out of jail which is very easy if you don’t spend all your gains.


#59

Good advice but worth considering that any financial or business investment you make could be considered a gamble. Doesn’t mean you won’t be forced to pay taxes on your gains.

Also, even with pure gambling in the legal definition you are still liable for tax. When you bet on a horse you choose to pay tax on your stake or your winnings. Those bastards will get theirs taxes!


#60

Well they can pay my losses too :disappointed_relieved::disappointed_relieved:


#63

Disclaimer : I don’t advise anyone to not pay their tax bill but there are ways in the UK to turn your Crypto into Fiat without incurring a tax bill.

1st off you can buy up-to £11k worth of gold bullion with Crypto & be within the capital gain limit which is just above 11k from memory so you can take 11k per year tax free.

The second method which is better if you have more than 11k to move is to buy UK gold coins with it, UK gold coins, sovereigns & 1 Oz Britannia’s are classed as currency & are both VAT & CGT exempt on any amount, so you could technically move your Crypto to Gold & not pay tax.

As stated above, this is neither financial advice or a tax avoidance advise, it is simply what the UK Government state as part of its tax laws, so follow the law & you will be good as gold.

Cheers :sunglasses::+1: