Are you buying or trading Crypto?
If you are thinking about buying cryptoassets (“crypto”) you need to know the basics and understand the risks before jumping in. And remember, if you decide to invest in crypto then you should be prepared to lose all the money you have invested.
The range and accessibility of crypto have grown rapidly in the last few years, accompanied by a surge in speculative trading – which means people trading just because they have heard it may rise in value, rather than seeing evidence to support a potential rise. A number of people invest simply for fun!
Crypto can be thought of as ‘digital representations of value or rights’ that are secured by encryption and typically use some type of ‘distributed ledger technology’ (DLT). DLT allows data to be recorded and stored across a network of participants. This keeps the data secure and means there is no one single central data storage point or one central authority that grants participants permission to access and participate in the network.
The way some cryptoassets are created and operated makes them very different from what some people would class as ‘tangible’ assets (meaning things that you can physically see and touch) like gold or cash. So called ‘unbacked’ crypto have no tangible assets that sit behind them. Their price can increase or decrease depending on whether other people are willing to buy them. If people stop buying, the price could fall dramatically.
Whereas central banks – like the Bank of England – issue and oversee the money we use daily (fiat currencies), cryptoassets are developed and run by groups, individuals, or companies. Publicly available information about some of these groups/individuals can be vague, and as crypto activity is not regulated yet in the UK, there is no safety net if things go wrong.
Currently, using crypto as a means of payment is very limited – they’re accepted by certain IT and travel companies, for example, but you probably won’t be doing your weekly shop or paying your 5-a-side football subs with crypto. The reason for this is that cryptoassets tend to be very volatile, so it’s hard to pinpoint their value from one day to the next, which makes them unreliable as a payment method. However crypto that are are linked to fiat currency can be less volatile and more stable and have the potential to provide faster, cheaper and more efficient payments in the future. Some investors take the view that crypto could possibly one day be accepted in everyday transactions but this is some way off.
Investing in crypto comes with all kinds of risks, some of which you might not even have thought of. For example, converting crypto to fiat currency can prove challenging and holders must keep a record of their digital keys. Capital gains tax can apply to exchanges and other disposals of crypto, even if fiat currency has not been realised. In 2022, crypto lender, Celsius, filed for bankruptcy and owed its users $4.7 billion, meaning many investors could not get their money out and did not get anything back.
Following the surge in people’s interest in crypto over the last few years, scammers have been increasingly active in targeting potential investors. Remember – if something sounds too good to be true then it probably is. Find out how to protect yourself and others from investment scams on the ScamSmart site.
If you are trading in crypto be aware HMRC expects you to keep detailed and accurate records of your purchases and sales. In 2021 they published their internal Cryptoassets Manual which outlines how they measure any profit or loss on trading and details the records required. You can see this here: Cryptoassets Manual – HMRC internal manual – GOV.UK (www.gov.uk). It has just been announced in Budget 2023 that new boxes will appear on the self-assessment tax return to prompt crypto disclosures next year.
Anyone trading in Crypto needs to be aware of their tax obligations and when transactions need to be included in their tax return. Please make sure you tell us about any transactions (even if fiat currency has not been received) so that we can assist and include the appropriate amounts in your self-assessment tax return, as required.
Employer duties for the change in the tax year
As an employer running payroll, you need to report to HM Revenue and Customs (HMRC) on the previous tax year (which ends on 5 April 2023), give your employees a P60, and prepare for the new tax year, which starts on 6 April.
What you need to do When
Send your final payroll report of the year On or before your employees’ payday
Update employee payroll records From 6 April
Update payroll software From 6 April
Give your employees a P60 By 31 May
Report employee expenses and benefits By 6 July
HMRC have published important information for employers on GOV.UK, which includes help with finishing the tax year 2022 to 2023.
Please talk to us about our payroll services; we offer a secure payroll service that not only saves you time and money but can eliminate the risk of getting something wrong.
‘Help to Grow’ website for businesses
The Department for Business and Trade (DBT) has unveiled a new centralised website, targeted at helping the UK’s 5.5 million businesses.
The new ‘Help to Grow’ site from DBT is aimed at upskilling both big and small businesses across the country by helping them to:
- learn new skills,
- reach more customers, and
- boost business profits.
Latest HMRC tax webinars – for the self employed
Webinars from HM Revenue & Customs (HMRC) are intended to help the self-employed understand tax issues that affect them. Listed below are a number of upcoming live HMRC webinars.
The webinars are free and last around an hour.
Business expenses for the self-employed
Tue 11 Apr at 1:45pm
Car expenses for the self-employed
Wed 12 Apr at 1:45pm
Residential property income for individuals – an introduction
Tue 18 Apr at 11:45am
Tue 25 Apr at 9:45am
Residential property income for individuals – expenses and deductions
Thu 20 Apr at 1:45pm
Thu 27 Apr at 11:45am
Record keeping for the self-employed
Fri 21 Apr at 11:45am
Capital Allowances for the self-employed
Tue 25 Apr at 1:45pm
How to apply the VAT reverse charge for construction services
Thu 27 Apr at 9:45am
Latest HMRC tax webinars for employers
Webinars from HM Revenue & Customs (HMRC) are intended to help employers and businesses understand tax issues that affect them. Listed below are a number of upcoming live HMRC webinars.
How to make sure you are paying the new minimum wage rates correctly
Wed 29 Mar at 1pm
Getting payroll information right
Thu 23 Mar at 11:45am
Fri 19 May at 9:45am
Employer filing obligations
Mon 22 May at 11:45am
Statutory Sick Pay
Wed 12 Apr at 9:45am
Thu 4 May at 9:45am
Statutory Maternity and Paternity Pay
Mon 17 Apr at 11:45am
Wed 3 May at 11:45am
Expenses and benefits for your employees – travel
Wed 19 Apr at 9:45am
Thu 11 May at 11:45am
Expenses and benefits for your employees – phones, internet and homeworking
Fri 21 Apr at 9:45am
Wed 10 May at 9:45am
Expenses and benefits for your employees – company cars, vans and fuel
Mon 24 Apr at 9:45am
Tue 16 May at 11:45am
Expenses and benefits for your employees – social functions and parties
Wed 26 Apr at 11:45am
Wed 17 May at 9:45am
Expenses and benefits for your employees – trivial benefits
Fri 28 Apr at 9:45am
Wed 17 May at 11:45am
Two Freeports announced for Wales
Two new Freeports, one in Anglesey and one in Port Talbot and Milford Haven, will help to create jobs, drive growth, and level up opportunities across Wales, the UK and Welsh governments have jointly announced.
The new sites are estimated to bring forward almost £5 billion in private and public investment and create over 20,000 new, high-skilled jobs, backed by up to £26 million each in UK Government funding. This will help to boost the economy and address gaps that are currently holding back investment.
Freeports are special areas within the UK’s borders where different economic regulations apply. Alongside a comprehensive package of benefits, the sites will enjoy tax and customs incentives to boost investment, creating thousands of high-quality jobs in some of our most disadvantaged communities.