Government sets out plan to make the UK a global cryptoasset technology hub - Also HMRC and crypto

The government announced last week moves that will see ‘stablecoins’ recognised as a valid form of payment as part of wider plans to make Britain a global hub for cryptoasset technology and investment. In brief:

• Stablecoins are to be brought within regulation, paving their way for use in the UK as a recognised form of payment.
• This is part of a series of measures to make the UK a global hub for cryptoasset technology and investment.
• Measures include legislating for a ‘financial market infrastructure sandbox’ to help firms innovate, an FCA-led ‘CryptoSprint’, working with the Royal Mint on a non-fungible token, and an engagement group to work more closely with industry.

See: Government sets out plan to make UK a global cryptoasset technology hub - GOV.UK (www.gov.uk)

Cryptocurrency and HMRC

Dealing in cryptocurrency can be a taxable activity, including exchanges and spending crypto. The question will be whether the buying and selling amounts to a trade, and so is chargeable to income tax: or is a chargeable gain on an investment, and so liable to capital gains tax: or whether it is so highly speculative that it is classed alongside activities like gambling and betting, and so is not taxable, nor can any losses be offset against other taxable profits. It is a complicated area so please do discuss this with your usual contact if you require more information and certainly provide details on any cryptocurrency activity when supplying your tax information to us.