Model me this, taxman! (UK)

[dragonmike]

So I've got 4 mining rigs.

- Rig one and two mine ETH for 35 hours and 23 minutes. Then ETN for 3 days. Then Cryptonight on Nicehash (straight to BTC) for a week... and then ETN ultil the end of the month. I exchange any altcoin mining proceeds to BTC at various arbitrary days.
- Rig three mines ETN for 30 days in a row. I exchange the proceeds against BTC.
- Rig four mines all sorts of coins & algos. Some autoexchange to BTC, some for a couple of days to their own wallet. I exchange any alcoin balance against BTC at the end of the month.

3 days into the next month I exchange 72% of the earned BTC against GBP.


1) What do I declare to the taxman?



Let's add more complexity:

The BTC proceeds I did not cash out I exchange for ETH and invest into a token ICO. 2 months later, I get an allocation of 10'000 tokens. The price of said coin goes up by 200%. I do not sell anything.

2) What to I declare to the taxman?
3) I decide to sell the proceeds of the ICO against BTC. What do I declare to the taxman?
4) I decide to cash out a round amount of BTC (some from ICO proceeds, mixed up with all sorts of mining proceeds). What do I declare to the taxman?

I'm like everyone, I don't like to pay taxes. But I don't want any problems with the HMRC. The problem is that I do not have a single clue about what I should declare, and how I am supposed to deal with the scenarios above (which are all real-life scenarios). The HMRC guidelines are - let's face it - useless.

Discuss.

[paxmao]

So I've got 4 mining rigs.

- Rig one and two mine ETH for 35 hours and 23 minutes. Then ETN for 3 days. Then Cryptonight on Nicehash (straight to BTC) for a week... and then ETN ultil the end of the month. I exchange any altcoin mining proceeds to BTC at various arbitrary days.
- Rig three mines ETN for 30 days in a row. I exchange the proceeds against BTC.
- Rig four mines all sorts of coins & algos. Some autoexchange to BTC, some for a couple of days to their own wallet. I exchange any alcoin balance against BTC at the end of the month.

3 days into the next month I exchange 72% of the earned BTC against GBP.


1) What do I declare to the taxman?



Let's add more complexity:

The BTC proceeds I did not cash out I exchange for ETH and invest into a token ICO. 2 months later, I get an allocation of 10'000 tokens. The price of said coin goes up by 200%. I do not sell anything.

2) What to I declare to the taxman?
3) I decide to sell the proceeds of the ICO against BTC. What do I declare to the taxman?
4) I decide to cash out a round amount of BTC (some from ICO proceeds, mixed up with all sorts of mining proceeds). What do I declare to the taxman?

I'm like everyone, I don't like to pay taxes. But I don't want any problems with the HMRC. The problem is that I do not have a single clue about what I should declare, and how I am supposed to deal with the scenarios above (which are all real-life scenarios). The HMRC guidelines are - let's face it - useless.

Discuss.

Mining has been declared a non-economic activity in the UK. If you can prove you have income just from mining - for the moment -you are OK.

Regarding the trading part, you do generate benefits once you sell as a previous post points out.

[jimbo2000]

So I've got 4 mining rigs.

- Rig one and two mine ETH for 35 hours and 23 minutes. Then ETN for 3 days. Then Cryptonight on Nicehash (straight to BTC) for a week... and then ETN ultil the end of the month. I exchange any altcoin mining proceeds to BTC at various arbitrary days.
- Rig three mines ETN for 30 days in a row. I exchange the proceeds against BTC.
- Rig four mines all sorts of coins & algos. Some autoexchange to BTC, some for a couple of days to their own wallet. I exchange any alcoin balance against BTC at the end of the month.

3 days into the next month I exchange 72% of the earned BTC against GBP.


1) What do I declare to the taxman?



Let's add more complexity:

The BTC proceeds I did not cash out I exchange for ETH and invest into a token ICO. 2 months later, I get an allocation of 10'000 tokens. The price of said coin goes up by 200%. I do not sell anything.

2) What to I declare to the taxman?
3) I decide to sell the proceeds of the ICO against BTC. What do I declare to the taxman?
4) I decide to cash out a round amount of BTC (some from ICO proceeds, mixed up with all sorts of mining proceeds). What do I declare to the taxman?

I'm like everyone, I don't like to pay taxes. But I don't want any problems with the HMRC. The problem is that I do not have a single clue about what I should declare, and how I am supposed to deal with the scenarios above (which are all real-life scenarios). The HMRC guidelines are - let's face it - useless.

Discuss.

Mining has been declared a non-economic activity in the UK. If you can prove you have income just from mining - for the moment -you are OK.

Regarding the trading part, you do generate benefits once you sell as a previous post points out.

You do not pay taxes on income earned from mining? Do you have any information regarding this? Is there any consideration of a transition from mining to investing. What I mean by that is, if you mined 1 btc at £100 but then held it until it was £1k, would you be taxable on the £900 difference?

[paxmao]

So I've got 4 mining rigs.

- Rig one and two mine ETH for 35 hours and 23 minutes. Then ETN for 3 days. Then Cryptonight on Nicehash (straight to BTC) for a week... and then ETN ultil the end of the month. I exchange any altcoin mining proceeds to BTC at various arbitrary days.
- Rig three mines ETN for 30 days in a row. I exchange the proceeds against BTC.
- Rig four mines all sorts of coins & algos. Some autoexchange to BTC, some for a couple of days to their own wallet. I exchange any alcoin balance against BTC at the end of the month.

3 days into the next month I exchange 72% of the earned BTC against GBP.


1) What do I declare to the taxman?



Let's add more complexity:

The BTC proceeds I did not cash out I exchange for ETH and invest into a token ICO. 2 months later, I get an allocation of 10'000 tokens. The price of said coin goes up by 200%. I do not sell anything.

2) What to I declare to the taxman?
3) I decide to sell the proceeds of the ICO against BTC. What do I declare to the taxman?
4) I decide to cash out a round amount of BTC (some from ICO proceeds, mixed up with all sorts of mining proceeds). What do I declare to the taxman?

I'm like everyone, I don't like to pay taxes. But I don't want any problems with the HMRC. The problem is that I do not have a single clue about what I should declare, and how I am supposed to deal with the scenarios above (which are all real-life scenarios). The HMRC guidelines are - let's face it - useless.

Discuss.

Mining has been declared a non-economic activity in the UK. If you can prove you have income just from mining - for the moment -you are OK.

Regarding the trading part, you do generate benefits once you sell as a previous post points out.

You do not pay taxes on income earned from mining? Do you have any information regarding this? Is there any consideration of a transition from mining to investing. What I mean by that is, if you mined 1 btc at £100 but then held it until it was £1k, would you be taxable on the £900 difference?

Not being an economic activity means that is not subject to VAT apparently. Just a link, but there are many https://www.rsmuk.com/blog/bitcoin-gains-dont-forget-that-the-taxman-will-want-his-share

However, it is subject to capital gains and being an individual means that you cannot discount the costs of the operation I believe, so you are compliant by not declaring, but if you sell... it is capital gains for the 100% as I understand it.