HM Revenue & Customs stands as the tax authority for the UK, and is set to publish a new set of guidelines when it comes to taxation on cryptocurrencies. This is scheduled to take place, come next week. In particular, it’s due on the 30th of March, 2021.
Aiming For A Crypto Manual
This update will set out to consolidate the already existing guidances regarding crypto taxation into one singular “crypto manual” for UK citizens to follow.
This comes by way of individuals claiming to have knowledge of the situation at large, who explained that the move itself comes as a bid to “future proof” any further guidance issued. This is due to how these guidances can very easily be updated on multiple occasions within the next year or so.
These same sources, who of course remained anonymous, stated that fresh guidances should be expected from the taxman when it comes to yields earned through the lending out of cryptocurrencies.
These sorts of yields have been made popular thanks to startups like BlockFi becoming more popular as well. Another focus of this future guidance is when it comes to staking rewards, where crypto holders earn rewards through maintaining various proof-of-stake blockchains.
Keeping Up With The Crypto Space
A spokesperson from the MRC spoke to The Block, a crypto news outlet, and revealed that a new internal manual was set to be published, one containing guidance when it comes to crypto taxation.
According to the spokesperson, this guidance manual stands as a demonstration from the HMRC to show its commitment to provide its customers with increased levels of tax clarity. This, in turn, will allow both businesses and individuals to have a greater understanding of the various tax consequences associated with the various types of crypto asset transactions, said the spokesperson. They also highlighted that this guidance will build upon the policy papers already published, but will further provide an approach to updating customers that offers greater flexibility in a sector that’s innovating at such a breakneck speed.
A Year Old Already Too Old
HMRC had already published two separate documents regarding crypto taxation guidance within its website: One prioritizing business and the other individuals. These tax guidances were updated back in December of 2019, and the crypto space has vastly changed within that small time frame, already.
One of the key highlights of how it changed is the sheer volatility. Since December of 2019, the crypto space saw spectacular lows due to the COVID-19 outbreak, then new spectacular highs this year. The NFT space boomed while the DeFi space is still booming. The crypto space is a very volatile one to do business in for now.