The rapid growth in cryptocurrency and distributed ledger technology has seen an influx of new cryptocurrency traders and investors which has attracted significant attention from HMRC and other tax authorities worldwide.
As a result, HMRC are actively enquiring into cryptocurrency activities to ensure that all individuals and businesses involved in cryptocurrency pay their fair share of tax.
This scrutiny means that it is essential for both individual traders and businesses involved in the crypto market to stay ahead of tax obligations, avoid potential fines, and structure their investments efficiently. With the rise of crypto as a mainstream asset class, getting expert advice ensures that you remain compliant and avoid costly mistakes.
Cryptocurrencies are becoming more popular with those involved trading tokens, being paid in tokens or even becoming full time crypto ‘investors’.
With higher rates of income tax of up to 45% for those individuals whose activities exhibit significant characteristics of trading, it may be beneficial to consider the use of alternative structures, such as a limited company, to undertake your crypto activities.
Choosing the right structure could potentially reduce your overall tax burden, access more tax-efficient ways of managing profits, and shield your assets. Tax planning is crucial in crypto to ensure compliance while maximising financial outcomes.
Excellent service from the team at ETC. They have been preparing my tax return for the past few years now and each time they’ve done an excellent job. Very professional, strong attention to detail, and always available to clarify any questions I have. Highly recommend their services, particularly for anybody with complex tax needs.
ETCs has provided us with expert guidance which helped us navigate complex tax laws. Their attention to detail and deep understanding of tax regulations gave us peace of mind, knowing we’re fully compliant and making the most of available opportunities. Professional, efficient, and trustworthy-highly recommend their services!
Great tax service from ETC Tax. They have handled my crypto tax requirements for the last few years and I’m delighted with their professionalism. Highly recommended.
ETC were well-informed about my specific request for advice regarding tax-treatment of crypto-assets. It was very easy to arrange a phone-consultation; the person who called me was very pleasant, communicated clearly and gave clear advice and information.
Our client was faced with a high VAT bill after HMRC challenged their VAT recovery on legal costs. ETC not only succeeded in defending our client’s position but did so in an innovative way, gathering and using facts and VAT case law to establish arguments as to why they could recover VAT costs thus defending their position and recovering the VAT costs.
Enterprise Tax Consultants provide valuable support to us regarding complex tax issues across a full remit of specialisms. The team are knowledgeable, approachable and commercial, finding us practical solutions to our clients’ problems. As a small accountancy practice this service enables us to offer advice and services usually only found in larger firms.
We’ve used different tax people in the past who have been OK, but since finding ETC our team couldn’t be happier; as we grow our practice we are so confident knowing ETC will be able to solve our clients’ problems – we know what we don’t know but we are confident that ETC will know.
ETC give us the whole spectrum of specialist tax advice enabling us to retain our clients and push the practice forwards.
Yes. In most cases, profits from selling, swapping, or using crypto are subject to Capital Gains Tax. If you're actively trading or earning crypto (e.g. through mining or staking), Income Tax may also apply. We help clarify what taxes apply to your specific crypto activities.
Common taxable events include selling crypto for fiat, swapping one cryptocurrency for another, using crypto to pay for goods or services, and earning crypto through mining, staking, or airdrops. We’ll help you identify what needs to be reported and when.
Yes. Reporting losses can be beneficial as they can be used to offset future crypto gains and reduce your overall tax bill. It’s important to track all transactions, even unprofitable ones, to remain compliant and take advantage of potential reliefs.
Possibly. If your crypto activity is frequent or resembles trading, operating through a limited company might offer tax advantages compared to being taxed as an individual. We’ll help assess your situation and advise on the most efficient structure.
HMRC is increasing its scrutiny of crypto activity and can issue penalties and interest for underreporting or non-compliance. We help you get things right from the start, or correct past errors, to avoid unnecessary fines and keep you where you need to be.
