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.