What Directors and Business Owners Need to Know
Cryptocurrency has become increasingly common amongst investors, entrepreneurs and business owners. However, many people still underestimate the tax implications of buying, selling or exchanging digital assets.
The misconception about crypto
A common assumption is that crypto investments sit outside the UK tax system. In reality, HMRC expects taxpayers to report taxable income and gains and is receiving increasing amounts of information from crypto exchanges and service providers.
Taxable events many investors miss
Many investors are surprised to learn that exchanging Bitcoin for Ethereum can create a tax liability even when no cash changes hands.
A taxable event may occur when you:
- Sell cryptocurrency for cash
- Exchange one cryptoasset for another
- Use crypto to buy goods or services
- Gift crypto to someone other than a spouse or civil partner
Why record keeping is critical
Crypto transactions can quickly become complex. Maintaining detailed records of acquisitions, disposals, transfers and associated costs is essential to ensure accurate reporting.
What business owners should do now
- Review existing crypto holdings
- Ensure gains and income have been correctly reported
- Identify historic omissions before HMRC contacts you
- Consider a voluntary disclosure if required
How Bryden Johnson can help
Taking professional advice early can help avoid penalties, reduce risk and provide confidence that your crypto tax affairs remain compliant.
Contact Us to see how we can help you identify if you are at risk and how to remain compliant.