0161 667 4911 enquiries@redstoneas.com

Cryptocurrency

Cryptocurrency

One of the hot topics at the moment is how Cryptocurrency trading will be treated from a tax perspective and it is important that anyone who is investing into cryptocurrency considers the tax implication and the vehicle being used to hold the investments.

The taxation of profits from buying and selling cryptocurrencies will fall into one of the the following categories.

  • Income tax
  • Corporation tax
  • Capital Gains tax

In deciding which one, HMRC have said this must be considered on a case by case basis. For an individual to be subject to Income Tax (or a company to be subject to Corporation Tax) on cryptocurrency gains, there needs to be evidence of a trading business. To decide if this is the case, HMRC say that badges of trade must be present.

Not all of these “badges” need to be present in order for a trade to exist. It’s only when you look at all the badges that are present in the context of the activity that you can decide if you are trading in cryptocurrencies or investing in them.

The biggest potential risk is that some people will make vast amounts of profit from cryptocurrencies, HMRC deem them to be trading, and end up being hit with the top rate of income tax on their earnings (currently 45% plus 2% National Insurance). At the highest rate of tax, individuals also lose their tax free personal allowance.

For this reason, it’s worth looking at your activity now and your future plans to  assessing the likelihood of being deemed to be trading, and if you are, consider moving your cryptocurrencies into a Limited Company where lower overall rates of tax apply. If the profits are in the company, some effective tax planning can make sure you hold on to more of your gains.

For those that are investing, these gains will be subject to Capital Gains Tax (CGT). Every individual has an annual exemption of £11,300 (for 2017/18 tax year). Any gains over and above that amount will be taxed at either 10% or 20% depending on your other income in that same tax year.

In most circumstances CGT will be the main tax applicable to gains from cryptocurrency but it will really depend on each individuals own circumstances.

If you want any advice on the above then feel free to give us a call.

What we Do

We Cover an Array of Individual & Corporate Accounting Services

Company Services

From incorporating a company, to filing year end accounts and everything in between, Redstone can deliver the full tailored package.

Personal Services

Redstone offer the full range of personal tax services, including CIS, self-assessment and partnership tax returns along with tax planning.

Specialist Areas

Not only do Redstone deliver the general accounting services, due to our strong working relationships with leading experts we are able to offer specialist advice in certain fields.

Non accounting financial services

Redstone can be your “one stop shop” for all your financial needs. Via our esteemed partners we can offer a variety of financial services.

Don't just take our word for it

See what our clients say

“I’m delighted that I chose Redstoneas for my accountancy needs as I’m left in no doubt this has been integral to growing my business and accelerated the achievement of professional goals. Craig and his team have provided first rate advise, shown exemplary practice and above all have displayed an outstanding level of professionalism in all that they have done for me. They continually provide in-depth knowledge on all matters and have really put me at ease with their pro-active approach, massive thanks again”

Jack Lomas

JLI Investments Limited

“I moved to Redstone Accountancy Services and have been impressed by Craig and his team. The service has been prompt and efficient and the advice of a high standard. Redstone have really strived to support my business growth and are happy to answer any questions as part of my package as opposed to putting on the “meter” every time I call, email or WhatsApp. If you want a modern, client focussed firm look no further than Redstone Accountancy Services Limited.”

Luke Barnett

Luke Barnett Property Management

"Redstone offer a very high level of service with a modern outlook, whilst still remaining professional. There are always on hand to offer advice as and when we need it, we see them as a trusted advisor."

Tony Keigher

Paul Anthony Furnishings

Accounting Resources & News Articles

October 2018 Budget Highlights

October 2018 Budget Highlights

Phillip Hammond delivered his Autumn 2018 budget, which as things stand will be an historic one as it will be the last one before Brexit.We have prepared a summary of the key points below:Personal Tax  From April 2019 the personal allowance will...

read more
When is Capital Gains Tax payable

When is Capital Gains Tax payable

Notwithstanding any of the comments that follow, an individual is allowed to make tax-free capital gains of £11,700 during 2018-19. There are also a number of circumstances when a disposal does not create a taxable gain. These include: The sale of personal...

read more
Work from home?

Work from home?

We are often quizzed by clients who are contemplating working from home: what are the tax consequences? And in particular, will I have to pay capital gains tax? Capital gains tax Generally speaking, if your business use is limited to allocating space for a...

read more

Contact Us

If you would like further information on our services, please contact us.

1 Lowry Plaza, The Quays, Salford, M50 3UB

0161 667 4911

enquiries@redstoneas.com

Mon-Fri: 9am to 5:30pm