The UK government has issued crypto tax rules for businesses. The tax rules apply to the UK businesses carrying out operations involving crypto mining, providing goods or services in exchange for crypto assets and crypto trading.

According to the rules published by UK HM Revenues & Customs on Nov 1, 2019, businesses have to declare the tax on an annual basis. Same as an individual, businesses should also calculate the tax in pounds sterling.

The rules state if a business acquires crypto-asset by providing services or goods and is not spent or used-up, it is not taxable. However, if the holdings were disposed of via investing or exchanging to fiat or other assets or paying for service, then it is subject to tax. An example of paying for service could be if an employer pays its employees in Bitcoin. In that case, it is money and subject to income tax on the value of assets.

The tax rules for crypto assets were first published on Dec 19, 2018. When originally published, the document outlined tax guidance for individuals who hold crypto assets. HMRC has now published the tax treatment of crypto asset transactions involving businesses and companies.

As the underlying technology continues to develop and grow in usage, crypto businesses are also evolving and innovating. Therefore, according to UK HMRC, the tax rules or treatment on crypto-assets need to be clarified.

HMRC is also planning to address the tax treatment of security tokens and utility tokens. It will be published on the future date. Note: existing guidelines apply to crypto-assets which are used as a method of payment.

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