Her Majesty’s Revenue and Customs (HMRC) – in charge of handling tax, payments and customs – has introduced the updated version of its digital coins guidelines for companies and individuals. 

Specifically, on November 1, the UK governmental department has publicly provided tax-related clarification to help businesses and individuals better operate. 

The guidelines have specified the agency’ stance on crypto-focused transactions, which taxes are in effect, proper ways to submit tax returns, account practices, together with numerous other topics. It also discussed how exchange tokens should be taxed, while notifying that regulatory instructions for utility or security tokens will be introduced in future times.

Specifically, the businesses that conduct token-related activities, nominally buy, sell, mine or exchange, or accept tokens as payment for their services and merchandise, are all subjected to at least one kind of tax. The taxes could be income tax, corporation tax, capital gains tax, stamp taxes and National Insurance contributions. 

None of the existing digital coins is classified as money or currency. 

HMRC noticed that rapid-growing nature of the crypto scene, and will carefully examine every case, in order to come up with fact and evidence-based tax provisions, rather than just theory. 

The new guidelines also amended the previously perspective of the agency, where crypto trading is considered gambling. From now on, crypto-related transactions will no longer be viewed as such.