[2018-01-31] BBCNews | Bitcoin - the Revenue comes calling

[cybersofts]

Bitcoin - the Revenue comes calling


Bitcoin came close to crossing $20,000 in December but dipped below $10,000 in January

It is that time of year many a self-employed person dreads, the deadline to submit your tax return and pay anything you owe. But this year there is a question a select few should be asking themselves - have I profited from my investment in crypto-currencies?

If you have, you could be liable for tax.

In 2014 Revenue & Customs published guidelines making clear the different taxes that apply to any earnings from crypto-currencies.

For most people who have bought a few bitcoins some years ago, it is Capital Gains Tax that will be relevant.

This will apply to any profits, once you hit the £11,300 CGT threshold, not just if they are converted into a standard currency but if they are used to buy other crypto-currencies such as Ethereum or to invest in initial coin offerings (ICOs).

But in recent weeks there is some evidence that a few people are making trading in crypto-currencies a full-time job, in which case they are likely to be liable for income tax on their earnings.

Now, the acceleration in the value of Bitcoin and other crypto-currencies happened over the course of 2017 so it is unlikely many people will have incurred tax liabilities in 2016-17, the year HMRC is currently examining.


Fraudulent tactics

But over recent months there has been a flood of Bitcoin money heading into everything from ICOs to property - so next year there should in theory be a big boost for the government's Capital Gains Tax receipts.

One accountant told me plenty of his clients had piled into Bitcoin but seemed unaware of the tax implications.

What is clear is the whole crypto-currency industry is now under the spotlight of regulators around the world.

They are concerned not just about tax evasion but money laundering and major fraud.

In the United States this week the Securities and Exchange Commission got a court order to halt an ICO attempting to raise $1bn (£0.7bn) to fund what was claimed to be the world's first "decentralised" bank.

The regulator alleges this was a scam that had already used what it described as fraudulent tactics to raise as much as $600m, including failing to disclose the criminal background of key executives.

AriseBank has blamed the dispute on "confusion" over its activities and crypto-currencies.

Accountants have a warning for those who invest their crypto-currency gains in schemes that turn out to be fraudulent - if you lose your money, you won't even be able to write it off against tax.

Source: http://www.bbc.com/news/technology-42872610

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[Harlot]

The national revenue boost will be really significant as if they found a proper way to tax all the income and capital gains received by traders and miners it will surely increase the national income of that country much more if that country has a lor of cryptocurrency miners and traders. This will be a big hurdle for them as regulating and enforcing something like this might not be fool proof as tax evaders will most likely find a way to cloud their real income.

[Ozero]

Soon, almost all countries will be enacted with the appropriate laws, obliging them to pay tax on income from crypto-currency activities. A positive aspect in this is that at the same time the state should recognize the existence of the crypto currency, determine its status and recognize it as the object of taxation.
      It's a good thing that while in my country they have not decided how to deal with the crypto currency, and so far there are no laws on it.

[Lancusters]

Soon, almost all countries will be enacted with the appropriate laws, obliging them to pay tax on income from crypto-currency activities. A positive aspect in this is that at the same time the state should recognize the existence of the crypto currency, determine its status and recognize it as the object of taxation.
      It's a good thing that while in my country they have not decided how to deal with the crypto currency, and so far there are no laws on it.

It seems to me that you're oversimplifying the situation. To take the law easy, but very difficult to achieve its execution. At the moment all users of the cryptocurrency forced to periodically change their coins for Fiat money. This allows the government and banks to have leverage on each user cryptocurrency. But as soon as bitcoin will get the properties of the currency will change. We would not need the approval of the government. We'll get a chance to call the shots.