Investment platform eToro is warning UK investors that their profits
from investing in cryptocurrencies are likely to come under greater
scrutiny from the HMRC, Her Majesty’s Revenue and Customs, a
non-ministerial department of the UK Government responsible for the
collection of taxes.
In August 2019, the HMRC required all UK based investment platforms
and exchanges offering crypto assets to provide details of all their
crypto investors, suggesting that they will be looking out for
investors who have not declared their gains from digital assets
eToro is recommending investors to begin working out their tax
liabilities as soon as possible and start making provision to pay
their bill. Given that a lot of people holding crypto assets are young
investors with no experience of completing a tax return, the trading
company has developed a calculator that allows them work out their due
taxes. In addition to the tax calculator, eToro has also published a
series of guides and helpful articles on its website.
Iqbal V. Gandham, UK managing director of eToro, commented:
“Cryptoassets like bitcoin have attracted a lot of interest from
people who are new to investing and have probably never filed a tax
return in their life. It’s really important for investors to start
doing the maths now so they know how much profit they’ve made and the
tax due. You don’t want to leave it too late and end up with a nasty
shock when it’s time to pay your tax bill, or face a hefty fine if you
miss the deadline. Our calculator can help crypto investors understand
what they owe.”
“Bitcoin first made the news when its value began to soar and lots of
people started investing in it, alongside other crypto assets such as
Ethereum. Crypto has become a gateway for investing and many of those
original crypto investors have diversified into other assets,
including stocks.”
eToro has made clear that in its platform, users invest in the actual
cryptoasset. In addition, selling, exchanging or using crypto assets
as a payment method are all considered a disposal by HMRC. Regardless
of the reason for buying cryptoassets, when the crypto asset holder
actions a disposal, any gains are liable to capital gains tax. It is
up to the investor to notify HMRC and pay any tax due.
