Crypto accounting is important

so that you remain legal We can help.
The tax points for crypto transactions can catch you out. Using Bitcoin to buy Ethereum or an NFT is a tax transaction.
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Keep yourself legal.
It is a criminal offence not to pay tax, reason enough. But in practical terms if you have crypto on an exchange your activity is likely to be reported to the taxman.

In addition if you want to cash in your gains the bank is likely to ask to understand for the origin of the funds. A tax return is a good audit trail to show the bank.
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People with Crypto often make a lot of transaction. A lot. The result is that there can be a great deal of data to process. Analysing digital assets and tokens manually would be quaintly ironic but wholly inappropriate. That would not be a good use of your time or your accountant’s time. A better approach is to use software such as Koinly to work out your gains, losses and income. Your accountant can then use this data to prepare your tax return.

At The Accountancy People we are not frightened of Crypto, we understand how it works and how it is taxed. It’s not that complicated. We know that the vast majority of transaction are for legitimate not criminal activity. We want to share your excitement if you have life changing values of gains; and to help you get it taxed right and ensure you and your family benefit from your foresight.

If you are mining it we recommend you talk to us about your tax structure.

01
We can register you for tax and make sure your returns are done on time.  You can rest easy knowing your returns are complete; we also pay for insurance so if you do have an investigation the cost of defending yourself is covered
02

Mostly crypto gains are treated as capital gains.  This is good because generally capital gains are taxed less heavily than income tax.  There are a couple of traps you need to be aware of:

  1. When you use one crypto to buy a different token this is a tax transaction.  You are selling the first at the £ market value.  You will be making a taxable profit or establishing a loss.
  2. Individual capital gains run to the tax year end of 5th April.  Once you pass that date any tax liability is set in £.  If you have the funds to pay the tax in crypto, you are running the risk that a crypto bear market could make it difficult to settle the tax.  You definitely don’t want to sell your best crypto to pay a tax bill.
03

The way capital gains are calculated is odd.  They are calculated in the following way:

  1. If you buy the asset piecemeal then the cost is the average price you have paid.  You take the proceeds from the sale, take off the average cost which gives you your gain. Except:
  2. Any sales are first matched with purchases you make on the same day and then:
  3. Sales are matched against purchases in the month after you have sold.

It is odd, this complication is for anti-avoidance.  If you have lots of purchases and sales it all gets very messy!  This is why software is really helpful so computers do the heavy lifting.

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No complicated paper forms. No out of date computer software. Just efficient, user-centric cloud applications you can access from anywhere.
We let the computers do what they do best so that we can do what people do best. Your client manager is at the end of the phone whenever you need them. We charge a set fee so you don’t have to worry about an hourly rate. Our mission at The Accountancy People has always been to create hassle free accounting. The environmental impact of our low carbon footprint is simply a byproduct of our increased efficiency in our processes.
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We have a specific pathway for 90% of businesses and start-ups who need someone to take care of the ‘essentials’. We’ll explain what you need to know in plain English, tell you what we need from you in a timely manner and then you can forget about accounting and focus on what you do best.
  • Pay your monthly payment
  • Send us documents when we ask for them (you can often simply take a photo with your mobile phone and send through an app)
  • Send us your transactions using a service such as Koinly (we can help you if you need support here)
  • Let us know if there are any issues with our software
  • Pay your taxes when they are due
  • Let us know if there are any issues with our software
  • Talk to us about your finances so that you understand them
  • Ring or email us when you have a problem
  • Get on with your life. We will do the rest.
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