Her Magesty Revenue & Customs (HMRC) has published a guide to cryptocurrency operations for businesses.

The Office classifies cryptocurrencies (Bitcoin) traded on exchanges as goods and does not consider them to be a form of money or securities. At the same time, the manual does not concern security and utility tokens.

The following activities are taxable:

  • purchase / sale of cryptocurrencies;
  • exchange of cryptocurrencies for other assets, including cryptocurrencies;
  • mining;
  • sale of goods and services for cryptocurrencies.

The amount of tax depends on the income / expenses and net profit of the company. HMRC will determine the taxation format for each declaration in a separate manner. Depending on the circumstances, the business will pay one or more taxes, including:

  • income tax;
  • capital gains tax;
  • corporate tax;
  • stamp duty;
  • VAT;
  • insurance fee.

Most mining operations are classified as taxable events. If the mined coins are not traded, they relate to other income.

Private or home mining is not taxed.

The tax authority also determined that company employees can receive payment in cryptocurrencies, although they cannot make contributions to pension funds in them.

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