UK Tax Authority Issues Crypto Guidance for Businesses

The UK's tax agency has issued cryptocurrency tax guidance for businesses, following up a year-old promise.

After clarifying the situation last year for individual taxpayers, Her Majesty's Revenue & Customs issued guidance Friday for businesses and enterprises for crypto asset exchange tokens - such as bitcoin - which it taxonomically separates from utility tokens and security tokens.

Corporations engaged in trading exchange tokens, including selling goods or services for crypto or mining, are liable for tax payments.

The type of tax paid - capital gains tax, corporation tax, income tax, national insurance contributions, stamp taxes or VAT - are at the discrimination of the authority.

If mined coins are not traded they are considered miscellaneous income which carries its own tax burden.

Corporate token holdings are considered taxable events at disposal, incurring both capital gains tax and corporation tax.

As with crypto asset guidance for individuals, similar exchange tokens can be pooled for ease of calculation.

Guidance for hard forks and airdrops is also provided, although there's no apparent change from the individual guidance issued in 2018.

Employees can be paid in crypto assets under the new tax laws, regardless of the authorities non-recognition of crypto assets as money.

Employers cannot use crypto assets for pension funds since HMRC does not view crypto assets as money or currency, but as a commodity.