How Mining is Taxed in the UK | Crypto Capital Gains Tax UK

Crypto Mining UK Tax: The HMRC categorizes crypto mining as either a hobby or a corporate activity which determines the amount and the type of tax to be paid. To determine how it is categorized, several factors are taken into consideration including how often mining occurs, organization, the risk involved, and if there is any commerciality involved.

AS A CORPORATE ACTIVITY

For businesses and companies that engage in mining crypto as a corporate/business activity, then the income received will be added to trading profits, and the tax for this will be categorized as Income Tax.

Additionally, if there are any rewards, benefits, or respective fees received in exchange for mining will also be subject to be added to taxable income, with expenses deemed as deductible.

Furthermore, if the mined crypto is disposed of, all gains from the time the crypto was acquired are to be added to the trading profits and will be subjected to pay National Insurance Contribution as well.

AS A HOBBY

With cryptocurrency making its way into society, we are seeing more people dive into this world of crypto mining and turning it into a hobby. For these individuals, any income gained from mining is to be separately declared as “miscellaneous income” on their tax return.

The income recorded will be the fair market value of the cryptocurrency at the current moment. Any acceptable expenses can be deducted before adding this entry to the taxable income. If an individual were to dispose of the mined crypto, then this will be taxed as Capital Gains Tax.

With mining gaining popularity in both individuals and businesses, you can count on Crypto Accountants to ensure you are sufficiently prepared when it comes to calculating how much tax is owed, whilst garnering as much profit as allowed by the rules and regulations set forth by the HMRC.

To contact us, visit our website at: https://www.cryptoaccountants.live/.