link0 link1 link2 link3 link4 link5 link6 link7 link8 link9 link10 link11 link12 link13 link14 link15 link16 link17 link18 link19 link20 link21 link22 link23 link24 link25 link26 link27 link28 link29 link30 link31 link32 link33 link34 link35 link36 link37 link38 link39 link40 link41 link42 link43 link44 link45 link46 link47 link48 link49 link50 link51 link52 link53 link54 link55 link56 link57 link58 link59 link60 link61 link62 link63 link64 link65 link66 link67 link68 link69 link70 link71 link72 link73 link74 link75 link76 link77 link78 link79 link80 link81 link82 link83 link84 link85 link86 link87 link88 link89 link90 link91 link92 link93 link94 link95 link96 link97 link98 link99 link100 link101 link102 link103 link104 link105 link106 link107 link108 link109 link110 link111 link112 link113 link114 link115 link116 link117 link118 link119 link120 link121 link122 link123 link124 link125 link126 link127 link128 link129 link130 link131 link132 link133 link134 link135 link136 link137 link138 link139 link140 link141 link142 link143 link144 link145 link146

Bitcoin warning: Cryptocurrency profits to be TAXED

Bitcoin warning: Cryptocurrency profits to be TAXED

Bitcoin warning: Cryptocurrency profits to be TAXED

BITCOIN will be taxed following a dizzying year of price rises and falls, industry experts have warned as the volatile cryptocurrency continues moving towards the mainstream.

With bitcoin’s price rising 1100 per cent over 2017 the HMRC has decided against creating new legislation to ensure the investment gains are taxed appropriately.

But experts have warned the cryptocurrency will not remain exempt from tax.

Benjamin Dives, CEO of London Block Exchange told Express.co.uk: “In this world, nothing can be said to be certain, except death and taxes. Cryptocurrency may be new and unique, but it is not exempt from tax liability.”

Mr Dives says individuals who profit from their Bitcoin investments will be required to pay capital gains tax — just like those who profit from the disposal of their stocks, shares and other investment instruments — through their annual self-assessment.

Profits from bitcoin price rises are subject to 20 per cent Capital Gains Tax — or 19 per cent Corporation Tax if it’s a company doing the trading. Everyone has a Capital Gains Tax free allowance of £11,300 per annum — any gains up to this amount are tax free.

But could bitcoin become a tool for tax evasion?

Richard Asquith, vice president of global indirect tax at Avalar told Express.co.uk: “It almost certainly already is, with either large amounts of undeclared gains on the current bubble or money laundering.”

However, Mr Asquith adds the disadvantage for fraudsters is the bitcoin public ledger systems makes it possible for law authorities to track down most of the crimes and criminals.

The other area that could be exploited according to Mr Asquith is payments made for household for services from small traders like plumbers, decorators and electricians and missing VAT and income tax returns will need to be monitored as the bitcoin technology goes mainstream.

So what fear is there for mass tax national tax evasion using bitcoin?

Daniele Bianchi, assistant professor of Finance at Warwick Business School, told Express.co.uk: “Other than the dark web, tax evasion and money laundering are the two main ways one could use Bitcoin to break the law.”

However, on Bitcoin becoming a major tool for tax evasion Mr Bianchi says it will be less and less appealing when it becomes a mainstream asset class, which is already happening.

Mr Dives, CEO of London Block Exchange adds the onus is on Cryptocurrency exchanges to bypass anonymity and comply with 'Know Your Customer' and 'Anti-Money Laundering' protocols, which are necessary in all traditional financial institutions.
 

He said: "Bitcoin can hide user’s identities but it is not fully anonymous. All other transaction details — such as time the transaction was made, amount sent and destination address — are recorded publicly on the blockchain and therefore all transfers made using Bitcoin can be traced back to specific wallet addresses.
 

“For this reason, Bitcoin is pseudonymous. This pseudonymity is appealing to users who value their privacy, but not enough for those who want to avoid taxes.”

 

Author DAVID DAWKINS

 

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

 

Alan Zibluk Markethive Founding Member