Cryptocurrency taxes in the UK

Involved in crypto? You must file your tax correctly

Harvex have Crypto Tax UK Specialists inhouse and provide tax related services to traders, investors and corporate businesses.

Our services cover completing your self-assessment tax return, income tax return, corporation tax return and specialised tax advisory services.

Handling crypto capital gains

Made money on crypto? You need to pay tax

Capital Gains tax vs Income Tax is a frequent crypto tax question. Harvex can advise how your digital assets should be taxed, and when.

Just one of the complete tax services available with Harvex.

Got questions about your tax?

We've explored the most asked tax questions

At the best of times tax can be confusing, adding in cryptocurrencies and digital assets and things become a mine field. Do you own game assets that are tokenised? Have you won some crypto? Got an airdrop? All these things contribute to some very complex tax scenarios.

UK Crypto Taxes

Digital asset accounting since 2014

Since 2014, Harvex have been providing digital currency tax advice to individuals and companies. We are a leading specialist firm operating in the Cryptocurrency Tax UK and International sectors, providing cost effective solutions to clients of all sizes, but more importantly correct, reliable crypto tax advice.

Specialist advice

Our Crypto Tax team are highly knowledgeable in the field. We’ve been providing advice and assistance from the early stages of Bitcoin through to the near mainstream adoption it has today.

As accountants specialising in this asset class, our experience covers a wide scope such as Cryptocurrency tax for Individuals and Companies, for traders, investors, Capital Gains on Crypto profits, tax relief on digital asset losses, VAT, bitcoin taxes and taxation on those accepting virtual currencies as a way of payment.

Tax legistlation

Owning, trading or accepting payment in crypto brings with it a whole new set of UK tax rules. As the world of cryptocurrency tax advances, Harvex have been at forefront of crypto tax related matters, advising clients in the UK, US, Malta and more.

As the legislation evolves we are aware that there is conflicting advice both on the internet and generally through different publications. Our chartered accountants and crypto tax advisors can explain the correct treatment and provide you with peace of mind that you will not be stuck with a tax liability in years to come!

Whether this is bitcoin, Ethereum, less known Altcoins or indeed tokens we can help.

Have specific needs?

We know how to account for everything from airdrops, to bounties, to forks, as well as trading and investments gains and losses. Additionally ICO’s / STO’s and even IEO’s (Initial Exchange Offering) are bringing new accounting complexities. We know how to solve these so our clients have reliable and correct accounting reports.

Income tax return

Profits from cryptocurrency are likely to be taxable, how much can vary. Explore Harvex’s personal tax services.

Corporation Tax

Harvex have extensive experience completing corporation tax returns for crypto companies in a range of sectors.

VAT

Harvex can explain the correct VAT treatment of all cryptocurrency, including sales, purchases, trading and more.

Crypto Losses

If you've lost money on crypto investments, then Harvex can use this to offset profits and therefor tax profits.

The Complexities of Tax

HMRC cryptocurrency tax stance

As with any business, if income is received (in any form) it should be subject to either Corporation tax, Income tax or Capital Gains Tax depending on the type of business and activity undertaken. There are a few acceptable ways to assess these gains and losses but these need to be assessed with due care to complete your self-assessment.

Harvex can help you tax plan so there are no surprises at the end of tax or financial year – if you have any questions please ask us!

Taxing crypto gambling

In early 2018 there were many rumours and online stories about crypto gains being classed as tax free gambling winnings. Business related Cryptocurrency gains are not treated as Gambling winnings in the UK, this should not be used as an acceptable way to avoid tax. Harvex can correctly prepare your tax return for any crypto gains.

Tax free countries - Digital Currencies

Depending on where you are a tax resident, you could find yourself in a crypto tax-free country. However, these jurisdictions are rare and you should not assume your digital asset is tax free income in your country. Harvex has an international presence and we can quickly assist you in the tax free status of your country.

Cryptocurrency tax return

Whether any profit or gain is taxable, or any loss is deductible the transactions will need to be looked at on an individual basis and will very much depends on a variety of specific facts. The relevant legislation will be considered and used to ensure the correct tax treatment is given.

Here at Harvex, we have the longstanding experience and knowledge to ensure your tax return is correct.

Tokens instead of fiat

A lot of crypto advisors will have experienced this, with the value of the token increasing or decreasing. Harvex can tax this correctly.

Crypto losses

Whether on a personal level or corporate level, if you are unfortunate to have crypto losses, Harvex can assist.

Issuing crypto invoices

Some businesses issue invoices in cryptocurrency, Harvex will advise on the correct taxation.

Crypto loans

If you’ve lent or received money in crypto, we can make sure you’re not incorrectly taxed on the transaction.

Crypto tax questions

Knowledge is power

There are not many in the world of cryptocurrencies who understand the financial legislation and tax rules around digital assets like Harvex do. One of the first to form as a specialist accountancy business to serve crypto and Blockchain since 2014, Harvex set the standard for what is required when it comes to tax and accounting for these complex financial instruments.

We explore some of the most asked questions here as part of a crypto taxes FAQ.

We know the industry

Our answers come from hundreds of accounts and tax returns submissions spanning millions of dollars, thousands of BTC and thousands of miles as an international business.

Our knowledge

As you can see from our FAQs, our knowledge is broad and we're able to provide expertise to almost anyone dealing with cryptocurrencies.

Do I have to declare my crypto investments to the tax man?

Investing in cryptocurrency is not a taxable event, therefore at this point you'd need not tell the tax man. However, the important point at which the tax man will become interested is when you sell, especially at a gain. If you've sold at a gain, then you should declare this to the tax man. Similarly if you have sold at a loss, you should explore offsetting tax losses. Harvex can help minimise your tax bill, using appropriate legislation. Find about more about UK crypto tax and investments or chat we us for USA and other jurisdictions.

Do we need to invoice for cryptocurrency payments?

If you want to receive crypto as a means of payment, you should invoice in the same way you would if you issued an invoice in USD, GBP, EUR or any other fiat currency. The only difference is you add your wallet address instead, or in addition to your bank details. If you are receiving passive income from a cryptocurrency investment portfolio, or a profit share, you may not be required to invoice - this would be a case by case basis.

How should we be accounting for our cryptocurrencies?

Depending if you hold cryptocurrencies for investment purposes, for trading purposes or accept them as means of payment will guide the accounting approach you should use. For example, cryptocurrency held for investment purposes would generally be held on the balance sheet and revalued periodically, with a different type of accounting approach implemented if the investment is held as an individual. This is very different to accepting cryptocurrency as a payment for services instead of fiat, or trading cryptocurrencies. Harvex' vast experience means we know how to correctly account for almost every digital asset class or digital currency type. Accounting standards for cryptocurrencies are evolving day by day and our job is to make sure we apply the correct accounting approach based on the latest legislation.

Do we have to pay tax on our cryptocurrencies if there's no profit?

Generally, no. If your company has no profit, the fact you own cryptocurrency will not immediately mean you owe any extra tax. On an individual level, if you have sold cryptocurrency at a loss, then you may actually be able to reduce your tax bill. In both the above cases of companies and individuals, we would recommend discussing with Harvex to ensure you are tax reporting your cryptocurrency correctly, as tax structures and situations are frequently different, especially in the cryptocurrency sector.

Can I buy Cryptocurrency through a Limited Company?

Yes, in the UK it is perfectly acceptable to purchase Cryptocurrency, such as Bitcoin (BTC), via a Limited Company. Other acceptable ‘legal forms' to purchase Crypto assets are as a Sole Trader or Partnership. The distinction between each will be in the accounting and tax on the purchase.

Do Crypto Hodler's pay tax?

In the majority of jurisdictions, including UK, USA and Malta, a cryptocurrency 'hodler' will not be taxed. This is because the event of purchasing cryptocurrency is not a taxabale event. As a result, if you hold your investment indefinitely, irrespective of the value, you will not have to pay tax.

Exchange reports

Here at Harvex we have worked with reports from almost every crypto exchange accounts. Send us your data and we can do the rest from analysis through to tax planning.

Tax on unlisted tokens

If you are holding an early stage crypto asset, the taxable value may be hard to define. Here at Harvex, we are used to dealing with crypto assets that are yet to list, and can inform you of the tax approach to use.

Tax on Airdrops

Let Harvex ensure you pay the correct taxes on any airdrops you may have received, whether traded, sold, or hodled.

Crypto bounty taxes

Crypto bounty hunting is growing in popularity – if you are one of these people, get in touch with Harvex to understand your tax position.

Crypto related services

Blockchain & Dapp accounting

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What They say ?

Since we began working in Blockchain and Crypto in 2016, Harvex have been the perfect partners for everything to do with our finances. We're able to accept any currency, handle our FX and brokerage and they secured our bank account. Along with handling all our accounts and tax, we couldn't cope without Harvex.

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Managing Director

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