Hi all,
I’m curious as to the experiences of those who day trade or have had to pay tax on their activities in the UK. From my limited perspective it seems quite complicated if you do a lot of trades and has anyone been audited before any money has been added to your account?
Is it just a case of keep records and declaring every trade you do which is essentially liable for tax? and then informing HMRC?
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I should imagine there are also people out there who didn’t realise what they owed and then got stung with a huge bill. Has anyone experienced that?
Whats tax??👀
>Is it just a case of keep records and declaring every trade you do which is essentially liable for tax? and then informing HMRC?
Yes, but can sometimes be easier said than done. You will need to register for Self Assessment and report on there.
Note, even if you are ‘trading’ it’s unlikely you are trading for tax purposes.
>Only in exceptional circumstances would HMRC expect individuals to buy and sell exchange tokens with such frequency, level of organisation and sophistication that the activity amounts to a financial trade in itself. If the taxpayer’s activity is considered to be trading then Income Tax will take priority over Capital Gains Tax and will apply to profits (or losses).
https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual
You probably won’t be eligible for it.
If your doing it as a job itll fall under income tax
If not it’ll fall under CGT and you’d have to make more than £12k profit to be eligible
https://www.cointracker.io/blog/cryptocurrency-taxation-in-the-united-kingdom
This explains far better than hmrc/gov websites
i would suggest trying out [cryptotaxcalculator.io](https://cryptotaxcalculator.io) — i had an easy time handling everything this year with them
Crypto taxes have always been a challenge for me since I have so many transactions to deal with. I used to do it manually, but now use Koinly which has helped a lot. It is a crypto tax software which generates all the tax forms you need by connecting with the exchanges/wallets that you have invested in. It is also pretty reasonably priced compared to other software, and is accurate.
It is important to declare every trade as it creates a taxable event that needs to be accounted for. Using the software ensures that I don’t have to spend too much time accounting for each transaction.
Non-KYC DeFi Wallet = what taxes?
“I lost my Seed Phrase”