3

If I mine bitcoin, would it count as income in the UK? If so, would I have to declare the value of my bitcoin on any forms which ask for how much money/income I have?

4

Yes you would.

Bitcoin is a form of property right or asset, just like any other form of wealth. And, income is a positive increase in the sum total of your property rights. You might be able to take deductions in connection with whatever you parted with in order to obtain a bitcoin, depending on the transaction, just as you might be able to take a deduction for inventory expenses associated with income in the form of money.

6
  • Stock shares are also property, whose value goes up and down. You report income after a sale, not after a market fluctuation. Why would bitcoin be legally different, and be income before it is converted?
    – user6726
    Jan 12 '18 at 16:19
  • 1
    @user6726 Stock shares are a good analogy to bitcoin. Stock shares are a form of wealth, just like stock shares, and I agree that a mere change in value of bitcoins you happen to own wouldn't be a realization of income for tax purposes unless you are required to use mark to market accounting for some reason (e.g. govt program resources tests mark to market). But, if you get bitcoins in exchange for goods/services, that is income just as if you had gotten money. "Mining" bitcoin is a bit like receiving IPO stock in exchange for investment banking services offered to the company making the IPO.
    – ohwilleke
    Jan 12 '18 at 18:33
  • @user6726 So say if I was on ESA benefits which requires that I have no more then £x in my name. Would I have to have to declare the amount I have in bitcoin or not? I want to know for 1) just having bitcoin and 2) spending bitcoin.
    – user15148
    Jan 12 '18 at 22:17
  • I cannot tell: the authorities are not at all helpful in saying what the actual law is.
    – user6726
    Jan 12 '18 at 22:34
  • @user15148 I think that you would have to declare the amount that you have in bitcoin. You would have to declare the amount of gold coins or Euro denominated bank accounts you have and bitcoin is no different.
    – ohwilleke
    Jan 12 '18 at 23:12
0

Yes.

HMRC "does not consider cryptoassets to be currency or money" but sees them as having economic value because "they can be 'turned to account' - for example, exchanging them for goods, services, fiat currency (that is money declared by a government to be legal tender) or other tokens". They are "a new type of intangible asset".

Individuals are liable "to pay UK tax if they are a UK resident and carry out a transaction with their tokens which is subject to UK tax". They are liable for "Income Tax and National Insurance contributions on cryptoassets which they receive from their employer as a form of non-cash payment [or from] mining, transaction confirmation or airdrops." - HMRC cryptoassets for individuals

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