BKL partner and cryptocurrency tax specialist Geraint Jones has contributed to Accounting Technician Magazine’s article on cryptocurrencies.
Accounting Technician Magazine is published by the Association of Accounting Technicians (AAT). The article, Bitcoin’s Flip Side, appeared in the November/December 2018 issue and was written by Loulla-Mae Eleftheriou-Smith.
The article asks: ‘What should people and companies who have been trading or making money through cryptocurrencies do, and how can accountants advise them?’
Geraint shares his recommendation to ‘take a sensible and justifiable view on a case-by-case basis, applying existing tax law and making sure your methodology is consistent.
He comes across three types of people in his work with cryptocurrencies: “Professional gamblers, people at home who are doing a very small number of trades for a bit of fun, and people who are deeply embedded in the crypto world.” He believes many people who bought Bitcoin during the December price spike will be sitting on large losses, while others who sold big could be stung later down the line by another cryptocurrency, illustrating the gamble people take when investing in these products.’
The article goes on to explain how we ‘apply existing tax law to [BKL] clients’ work, using badges of trade to determine whether profit from a crypto-asset should be judged as a trade or capital gain.’
Finally, Geraint shares his belief that ‘while digital currencies are not recognised as legal tender in the UK … a type of blockchain-based cryptocurrency will become dominant eventually: “Maybe not in my lifetime, but it will.”‘
The full article is available to read here.
BKL’s tax specialists are able to advise clearly and accurately on the tax implications of buying and selling cryptocurrencies, mining cryptocurrencies, arbitraging exchanges and margin trading as well as transferring back into ‘fiat currencies’ and ensure that all disclosures are made precisely and promptly to HMRC. This will provide peace of mind and the assurance that you are complying fully with the law.