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If I’m trading dozens of times a week, that’s economically identical to running a business, yet I still get CGT treatment and the annual exempt amount. Meanwhile a freelancer doing similar volumes of work pays income tax and NI. Feels inconsistent… Naaaa
Please don’t push crypto toward income tax. The CGT allowance already got slashed to almost nothing in recent years. Most of us are just long term holders, not day traders… moving to income tax would hammer ordinary savers disproportionately.
The real pain point isn’t CGT vs income, it’s record keeping. Every swap between tokens is a disposal event for CGT purposes. People with hundreds of DeFi transactions are effectively required to produce a full audit trail HMRC barely has tools to check huhhh…
There’s a fairness argument for treating high frequency, business like trading as a trade (income tax) while genuine investors get CGT… this already exists as the badges of trade test in UK tax law and could just be applied more consistently to crypto.
Compare this to the US where you’re taxed even on crypto to crypto swaps at often less favourable rates. The UK system even annoying as the paperwork is, is still comparatively investor friendly.
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The HMRC currently treats most crypto disposals like selling, swapping, spending, as subject to capital gains tax, with staking rewards and mining often taxed as income. Some people think this is fair, others think crypto trading is basically income and should be taxed accordingly. Where do you land?