Tax and Duty Manual Part 02-01-03 has been created to clarify how the normal tax rules apply to transactions involving cryptocurrencies.
It sets out the treatment under Income Tax (IT), Corporation Tax (CT), Capital Gains Tax (CGT), Value-Added Tax (VAT) and Pay As You Earn (PAYE).
The purpose of the manual is to give guidance on the tax treatment of various transactions involving cryptocurrencies.The tax treatments outlined in the manual are for tax purposes only and do not reflect on the treatment of cryptocurrencies for regulatory or other purposes.
For businesses which accept payment for goods or services in cryptocurrencies there is no change to when revenue is recognized or how taxable profits are calculated. Where there is an underlying tax event on a transaction involving the use of a cryptocurrency there is a requirement in the tax code for a record to be kept of that transaction which will include any record in relation to the cryptocurrency. Therefore no special tax rules for cryptocurrency transactions are required.
For regular tips, tricks and payroll updates, enter your email on our site, OR follow us on Twitter, Facebook, Google+, or LinkedIn
All the best,
The Team at Jefferson