UK tax authority publishes updated crypto guidance
March 30, 2021, 9:17AM EDT
1 min read
HM Revenue & Customs, the United Kingdom’s tax authority, has published fresh guidance on the taxation of cryptocurrencies.
The Block revealed on March 26 that the taxman would be rolling out a new “Cryptoassets Manual” this week, consolidating previous guidance and offering a steer on staking activities for the first time.
Staking is a process through which crypto holders can earn rewards for helping to maintain proof-of-stake blockchains. The updated guidance states that staking activities could represent a taxable trade depending on a range of factors, including degree of activity, organization, risk and commerciality.
“If the mining activity does not amount to a trade, the pound sterling value (at the time of receipt) of any cryptoassets awarded for successful mining will generally be taxable as income (miscellaneous income), with any appropriate expenses reducing the amount chargeable,” it continues.
“If the activity does amount to a trade, any profits must be calculated according to the relevant tax rules.”
HMRC last issued an update on crypto taxation in late 2019. Nimesh Shah, CEO of tax consultancy Blick Rothenberg, said the new manual was both more extensive and more detailed than previous guidance.
“This is an improvement on what we had before but we need to remember that this is HMRC’s interpretation and the guidance does not represent law,” he said.
“It’s disappointing that the government have still not legislated this complex area, and is leaving it to HMRC to make their own assessment on how the transactions should be treated. This isn’t right in my view.”
The Block Research was commissioned by Forte to create “Blockchain-Based Gaming: A Primer” which provides a comprehensive introduction to how blockchain technology is being employed in video gaming experiences.
Adobe is introducing a Photoshop feature that allows users to prepare images as non-fungible tokens (NFTs), which will include content credentials that marketplaces like OpenSea can display on their websites for each asset.