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CRYPTOCURRENCY ACCOUNTANT UK

Cryptocurrency Tax Accountant

What is a Cryptocurrency Accountant UK?

A Cryptocurrency Accountant UK is a specialist who helps individuals and businesses manage their cryptocurrency finances.

Summarised, they provide advice on tax implications, investment strategies and help clients keep track of their cryptocurrency holdings.

Cryptocurrency accountants are in high demand as the popularity of digital currencies grows.

A specialist Cryprocurrency Accountant UK will take into account the client’s individual circumstances and investment goals. They will additionally help clients stay up-to-date with the latest changes in the cryptocurrency market.

Cryptocurrencies are subject to different tax rules than traditional investments. A Cryptocurrency accountant UK can help clients minimise their tax by structuring their investments in the most efficient way.

Cryptocurrency accountants are also experts in anti-money laundering regulations. Compared to some industries, Cryptocurrency is a relatively new area with less accessible information than some. The right accountant can help comply with industry regulations and avoid any penalties.

How a Cryptocurrency Accountant UK Can Help...

Corporation Tax, Income Tax or Capital Gains Tax

The taxation of profits from buying and selling cryptocurrencies is more than likely going to fall in to one of these areas. 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 gains 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, 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 a company, some effective tax planning can make sure you hold on to more of your gains.
For those that are investing in cryptocurrency, these gains will be subject to Capital Gains Tax (CGT). Every individual has an annual exemption of £12,300 (for 2021/22 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.
Cryptocurrency Accountant UK

VAT

The buying and selling of Cryptocurrencies are outside the scope of VAT. But services connected with cryptocurrencies will be subject to VAT in the normal way. Examples include consultancy, settling debts with cryptocurrency, purchasing goods with cryptocurrency.
As would have been expected, the buying and selling of cryptocurrencies are outside the scope of VAT. Services provided connected with trading in crytpocurrencies, such as consultancy services, will be subject to VAT. HMRC also clarified that just because a transaction is settled in a cryptocurrency, this does not mean that the underlying supply is not subject to VAT. This means buying goods and services using Bitcoin, doesn’t mean VAT shouldn’t be charged in the normal way. As with any other transaction, the pound value is the equivalent of the market value of the cryptocurrency at the time of the transaction.

Transfer assets to your Spouse or Civil Partner

Transfer between spouses is currently exempt from CGT. This means that assets can be transferred between husband and wife or civil partners so that both annual CGT allowances are used. This effectively doubles the CGT allowance for married couples and civil partners. The transfer must be a genuine, outright gift.

Make use of losses

Gains and losses established in the same tax year must be offset against each other, so this will reduce the amount of gain that is subject to tax. Losses must be registered with HMRC within four years from the end of the tax year in which the loss has occurred. You’re allowed to deduct certain costs involved with buying and selling (incidental costs of acquisition and disposal) Crypto Assets from your gain when working out your CGT liability. These include: transfer fee, exchange fees, and fees for professional service such as lawyers and accountants relating to the buying and selling the crypto.

Choosing DIGI Accountancy as your specialist Cryptocurrency Accountant UK

As the popularity of cryptocurrencies continues to grow, so does the need for specialist cryptocurrency accountants. DIGI Accountancy is a leading provider of accounting and bookkeeping services for cryptocurrency businesses. Here are 5 reasons why you should choose DIGI Accountancy as your specialist Cryptocurrency Accountant UK:

1. We have a deep understanding of the cryptocurrency industry

Cryptocurrencies are a complex and rapidly evolving industry, and it is essential that your accountant has a deep understanding of how they operate. At DIGI Accountancy, our team of experts keep up to date with all the latest developments in the world of cryptocurrencies, so you can be confident that your affairs are in good hands.

2. We can help you navigate the regulatory landscape

Cryptocurrencies are subject to a growing number of regulations, and it can be difficult to keep up with all the changes. At DIGI Accountancy, we can help you navigate the regulatory landscape and ensure that you are compliant with all relevant laws and regulations.

3. We can help you optimise your tax position

Cryptocurrencies are subject to a variety of different taxes, and it is important to ensure that you are paying the right amount of tax. At DIGI Accountancy, we can help you optimise your tax position and minimise your tax liabilities.

4. We offer a comprehensive range of services

Cryptocurrency businesses have unique needs, and it is important to find an accountant that can offer a comprehensive range of services. At DIGI Accountancy, we offer a full range of accounting and bookkeeping services, including tax return preparation, financial statement analysis, and advice on compliance matters.

5. We are committed to providing the highest level of service

At DIGI Accountancy, we are committed to providing the highest level of service to our clients. We understand the importance of having a trusted advisor that you can rely on, and we will always go the extra mile to ensure that you are satisfied with our services.

If you are looking for a specialist Cryptocurrency Accountant, then look no further than DIGI Accountancy. We offer a comprehensive range of services, and our team of experts have a deep understanding of the cryptocurrency industry. Contact us today to find out how we can help you grow your business.

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