I've now downloaded Koinly and have set up API's to my exchanges/wallets but have a couple of issues.
1. Any coins which are staked on exchanges aren't showing up, I don't believe this is affecting my tax calculation but shows a massive current loss in my unrealized gains.
2. I am getting a capital gain profit/loss associated with every USDT/USD swap and purchase of crypto using USDT which I wasn't expecting. Are these down to currency rate of exchange variations?
Topic: Anyone with UK Tax experience? (Read 100 times)
Indeed. It can become very very costly to make an error on taxes. Especially knowing it can be easily considered as a fraud, and frauds go to a justice court. When you're checked by an inspector, he checks everything: your bank account, how do you live, do you have a big car, full of gucci clothes, and so on...
People often advice to pay for an accountant (but hey, they just repeat) but most of them, if not all, do not know how cryptos are taxed and probably have never heard about crypto. Paying a guy who doesn't know the problem? Good luck. Sure he can learn but still... it costs even more because time is money
Never mess with the taxes office. (I learned it the hard way but I was nasty during my tweenties
) 
In my community, almost all of us use such services. Better to pay few bucks than getting headache, mistake, paying more taxes than supposed etc...
also the risks of getting a fine for underreporting, and having to deal with more than just the fine afterward if the finance inspector that will be in charge of your case of 10$ unpaid profits on some shitcoin is himself a piece of...somethign!
I don't know what exchanges OP has used, but if he has activity on the ones that Koinly supports, which are a ton, it's really a no-brainer, just go for it, and don't waste money on some accountant that will charge you sometimes even in the thousands for the same job and who will use for sure also the same piece of software.
^Not sure how much it would cost you to hire one in the UK, but I'll bet it's worth it in most countries.
If OP is not looking at huge sums invested so straight 6 digits in booth assets and profit it really makes little sense to hire an accountant nowadays with all the programs around that need only clicking, it's good to hire one if you have a ton of other income sources and you plan on optimizing those, in this case, it's a different story but just for crypto, no, at EU/UK level prices a really good one will charge you over 50 euros per hour, and I swear, these hours are just some 15 minutes long in this profession.
I am however interested in some of the accounting software out there, does anyone have experience with how for example Koinly works? Do I give it access to my exchanges and then it uses the transaction history to produce a tax summary for the year?
In my community, almost all of us use such services. Better to pay few bucks than getting headache, mistake, paying more taxes than supposed etc...
The services most of the time use the API of your account you have on Binance or whatever CEX is supported.
Being read-only API, there is no risk for your money on the exchange platform. It synchronizes data and nothing more.
Otherwise, you may import a CSV or Excel file that you first download from the exchange, if avalaible.
Then the system generates different type of reports (capital gains, transaction history, turbotax,...)
Thanks for the input, the reddit thread looks very informative and I'll be sure to interact there in future too!
I don't have a level of investment in Crypto yet that I feel warrants the cost of a book keeper so I'm getting to grips with the requirements myself (this may change in future as my investment increases) However I do have to submit a self assessed tax return already so I believe I should be including crypto gains even if there is no tax due.
The two things I'm struggling most with how to keep on top of is:
1. Converting every transaction from $ to GBP on the day of selling, this feels very onerous!
2. Keeping a record of the market value of coins gained from staking for future capital gains calcs, how is this done when I'm paid regular fractions of coins?
I am however interested in some of the accounting software out there, does anyone have experience with how for example Koinly works? Do I give it access to my exchanges and then it uses the transaction history to produce a tax summary for the year?
I don't have a level of investment in Crypto yet that I feel warrants the cost of a book keeper so I'm getting to grips with the requirements myself (this may change in future as my investment increases) However I do have to submit a self assessed tax return already so I believe I should be including crypto gains even if there is no tax due.
The two things I'm struggling most with how to keep on top of is:
1. Converting every transaction from $ to GBP on the day of selling, this feels very onerous!
2. Keeping a record of the market value of coins gained from staking for future capital gains calcs, how is this done when I'm paid regular fractions of coins?
I am however interested in some of the accounting software out there, does anyone have experience with how for example Koinly works? Do I give it access to my exchanges and then it uses the transaction history to produce a tax summary for the year?
Probably not the answer you're looking for, but seriously — just hire a personal bookkeeper. All the time to stress out on your taxes could be used to do something more time-worthy; something that could probably earn you more money instead.
^Not sure how much it would cost you to hire one in the UK, but I'll bet it's worth it in most countries.
^Not sure how much it would cost you to hire one in the UK, but I'll bet it's worth it in most countries.
How does anyone else find this process?? It doesn't seem fit for purpose!!
It’s advisable to keep a detailed record of your crypto transactions, you can do this manually but it’s definitely stressful, I suggest you use a recommended software for this. Also consult a professional to look over your books so you don’t get into trouble and end up paying more than you bargained for. Taxscouts give a good assessment of how bitcoin is taxed. You can use their calculator to see how much you could be taxed for crypto gains.
There are other softwares that help you analyze your trades and generate real-time reports on profit and loss, coin values, and realised and unrealised gains, tax reports e.t.c. Ratimov created a guide dedicated to helping others file their crypto taxes.
[Tutorial] Crypto taxes for beginners
It’s advisable to keep a detailed record of your crypto transactions, you can do this manually but it’s definitely stressful, I suggest you use a recommended software for this. Also consult a professional to look over your books so you don’t get into trouble and end up paying more than you bargained for. Taxscouts give a good assessment of how bitcoin is taxed. You can use their calculator to see how much you could be taxed for crypto gains.
There are other softwares that help you analyze your trades and generate real-time reports on profit and loss, coin values, and realised and unrealised gains, tax reports e.t.c. Ratimov created a guide dedicated to helping others file their crypto taxes.
[Tutorial] Crypto taxes for beginners
Typically, tax payers use tax softwares to ease the load.
Since we're talking about UK, I recommend checking r/BitcoinUK's tax megathread. You'll find comprehensive guides, list of tax softwares and be able to discuss tax with locals, see: https://www.reddit.com/r/BitcoinUK/comments/ppf7k1/tax_megathread/
If you find the whole thing too complex and wanna err on the side of caution, you have the option of consulting a tax consultant, see: https://cointracking.info/law/
Side note: no blind trusting and exercise caution!
Since we're talking about UK, I recommend checking r/BitcoinUK's tax megathread. You'll find comprehensive guides, list of tax softwares and be able to discuss tax with locals, see: https://www.reddit.com/r/BitcoinUK/comments/ppf7k1/tax_megathread/
If you find the whole thing too complex and wanna err on the side of caution, you have the option of consulting a tax consultant, see: https://cointracking.info/law/
Side note: no blind trusting and exercise caution!
Having been increasing my Crypto holdings over the past year and taking profits recently off the price rally, I've been looking into my tax requirements.
It appears any gains made are under capital gains allowance and staking rewards are income.
However the record keeping required seems very intensive!!!
So I have to:
- Pool the costs of each coin separately to get an average buy price for future capital gains calculations
- Convert all transactions to £ (as I trade in $) at the exchange rate on the day of trading
- Record market value of all staked gains for future capital gains on these (this seems impossible with daily microscopic gains on many coins)
- Record gains/losses of every sell (converted to £)
I'm going to spend more time on this than actually trading!
How does anyone else find this process?? It doesn't seem fit for purpose!!
It appears any gains made are under capital gains allowance and staking rewards are income.
However the record keeping required seems very intensive!!!
So I have to:
- Pool the costs of each coin separately to get an average buy price for future capital gains calculations
- Convert all transactions to £ (as I trade in $) at the exchange rate on the day of trading
- Record market value of all staked gains for future capital gains on these (this seems impossible with daily microscopic gains on many coins)
- Record gains/losses of every sell (converted to £)
I'm going to spend more time on this than actually trading!
How does anyone else find this process?? It doesn't seem fit for purpose!!
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