That's the easy bit I reckon. The regular cryptocurrency I mean.
More tricky is handling my Steem income from blogging without any historical records, or working out how to handle income from Splinterlands where there's DEC earned for every win plus reward cards and cards I've purchased etc. etc. Then there are the cards I've rented and the income and cards received from others who've played my accounts. (insert screaming emoji) 😂
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Haha unfortunately, crypto was just considered gambling a couple of years ago so any gains you made weren't taxable as it was considered "prize money". Then any gains were taxed only when you cashed out to GBP. Now it's everything lol! They really changed their tune this last 3 years the HMRC! I had to trawl through 10 exchanges, put all the transactions together and have over 750 lines of various transactions.
Well, that's where the difference is between classing crypto as income and as an asset. If you're living off your steem earnings now through blogging then you will be subject to income tax. If not then it will be subject to capital gains and so any time you change out a Hive/Steem engine token to another, it's a taxable event unfortunately.
I posted this article a month ago about it and it links to the HMRC site which they also change as and when:
https://leofinance.io/@nickyhavey/capital-gains-tax-and-crypto-in-the-uk
I'm not an accountant by the way haha! If you have a crypto accountant then even better as they can tell you. I'm still unsure as to the exact form to fill in and when and if you need to declare it if below the tax threshold
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I'm not living off Steem earnings. I wish. 😁
But I was blogging 4 times a day and earning curation rewards which, from how I understand it is counted as income. My first 1000 Steem was earned that way. Even though I never declared it (as, as you say, it was considered gambling at the time) there will be no tax payable on it because, as a sole trader I had losses that year.
However, it still counts for capital gains although it's unlikely I was anywhere near the threshold. The issue is more the record keeping one for the time when I actually do want to sell it. Or if and when I reach 4x the CG threshold, at which point the gain needs to be reported, if no tax is due.
Anyway, I'm just taking it one step at a time. Right now I'm adding as much data as I can find to Koinly and I'll focus on Steemit and gaming after that. Mmaybe, by the time I get that far HMRC will have changed the rules and made it simpler again. 😂
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Judging by what's written on the CryptoAssets for Individuals page - this is a run down of which taxes apply:
So you won't be subject to income tax from blogging on HIVE/STEEM unless you are employed by someone here to do so and they pay you in STEEM/HIVE. It might be considered an airdrop but you'd only have to pay CGT when you dispose of the crypto or use it to pay for something, which you'd need the £ value of at time of disposal:
Another thing to think about is "pooling" where you'd just add each individual crypto in its own separate pool so you don't need to track every transaction and just bundle everything together (although they do say to keep track of every transaction, network fee and exchange fee as this is important in calculating your "allowable costs").
Essentially, any time you dispose of your crypto for ANY reason, make sure you have the following:
Some nice bed time reading for you on that link at the beginning of the comment haha!
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😂 I've read the stuff in that link a few times already!
Not sure about the employer bit anymore. I thought the same as you when I first read the documents - "ah. It won't apply to me as I'm not an employee". However, I've since been reading some stuff written by a UK tax advisor/accountant and he talks about receiving crypto income as a freelancer.
His response to a question from a self-employed artist for example was "you sell some art for 1 BTC. That is converted to sterling at that date and goes on your tax return as income and charged as appropriate. When you exchange into fiat a capital gain or loss is calculated as the proceeds less the cost when received as income."
So I think that blogging for crypto might well be counted as income. 😊
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OK, in that example, the artist has sold some art (product) for 1 BTC - i.e. someone has bought a product they sold, that goes into income with BTC at price x on date x. Then they sold that BTC for fiat at BTC price y on date y so subject to CGT.
I guess it would be more akin to what you earn as a content creator from Google AdSense for example if you have a successful blog or YouTube channel... That's the only thing I can think of that's similar but you aren't selling a blog like that artist was selling a product as no-one is buying your blog?
Otherwise, you'll be going back through every blog you've ever done, every comment you made that got voted on and earned a reward, every curation vote you ever made, checking the price at the time, every time you gained some HIVE/STEEM for staking Hive/Steem Power... I'd just pool it for CGT when you come to dispose your crypto but I'm not even close to CGT threshold anyway 😆
This might shed some light too:
https://www.gov.uk/guidance/check-if-you-need-to-pay-tax-when-you-sell-cryptoassets
That's exactly how I'm reading the "rules" as they are written at this time. 😁
The fact that a piece of art is a product makes no difference. In the fiat world if you write for money or sell art for money it is still income. Just a different business.
In the early days I was writing and receiving Steem for that writing. I didn't buy any assets but I ended up with some through writing. I did something to earn that Steem. Then that Steem became an asset and is now taxable from a CG perspective. At least that's how I see it.
I'm not overly concerned about it and there's no way I could go through every post and every upvote but I will be interested when I've made my best estimates to see where I stand with capital gains. If the rises continue at the pace they've been going I might reach the threshold in 2020/2021. There are another 3 months yet!!!!
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Yeah I did more digging last night and that other link I shared says that even if you didn't pay for the crypto in the case of getting post reward after 7 days, you will need to know market value of it at the time and then when you sell it, it's subject to CGT.
Jeez, what a crock 🤣🤣 you'd probably just use the $1 peg of SBD/HBD for author rewards to work things out. Going to be a fun few weeks going back through all that 😂
I looked up that coinly site you mentioned and there was a great article there. I may have to start using their service. Is it free to create an account and do they fill out the tax return form free too? Seems like too good to be true that!
Seriously considering powering down and just consolidating into BTC now and forget this ever happened whilst I'm still under the threshold here haha
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