Koinly App Tax reports not fit for UK?

Hi

I recently signed up with Koinly, ran a few reports and showed it to my accountant. My accountant followed up with the following remarks:

Blockquote" I can see the Koinly is not calculating the gains as per the UK rules. Koinly is only calculating the gain based on an average method, this is wrong and is not compliant with the UK tax rules."

Can you please advise how you are going to resolve this concern?

Regards
EffKay

1 Like

For unknown reasons @Koinly are currently nowhere to be seen on these boards.

As a UK user I would also be concerned if there are problems. However I would also be very surprised, because the service has lots of UK users.

First of all, do your settings look like the attached?

Hello Europa

Thank you for your swift response - I can confirm that my settings are exactly the same as yours.

I, too, am concerned… and it would be grate if they could provide an official response.

I always believe in researching things before committing but unfortunately with Koinly there was no way to research this without buying one of their plans… went for 2021 plan, went to run a report but then was told I cannot do this unless I purchase a 2020 plan… then I had to also purchase this too… I downloaded the contents, sent it to my accountant and then my accountant did a comparison between koinly’s automated report and their manual report… the above comments were their findings after all of this!

OK so I think the next step, if possible, is to provide an example of a calculation which your accountant thinks is wrong?

On Koinly you can click a transation to open up more detail, then there is a “Cost analysis” option which shows how Koinly did the calculation.

As I say, I would be surprised if there is a gross error - I have been here a few months, and when Koinly were still talking to us they were always able to reassure. They also have an extensive guidance page here which shows that they do understand the UK rules.

My guess is that some of your transactions are wrongly categorised. Koinly does need to be guided sometimes because it cannot automatically know your intentions on a given transaction.

Thanks - perhaps if I get a response from Koinly, I can arrange a meeting with my accountant so they can discuss this in more depth?

This is how gains are calculated if you are using share pooling:

Share pooling uses 3 different pools for cost calculations, the main pool “section 104” uses an average cost which is probably what your accountant is seeing. If you don’t see any usage of the other 2 pools then its probably because you do not have transactions that fall into this.

Hi,

Thank you for this.

I provided copies of reports generated from your website to my accountant, and the above was mentioned to me in response to what I provided.

So who should I believe?

As an aside, for the UK airdrops are generally treated as cap. gains, not income, so you might want to change that setting.

Thank you Forest - from my understanding, if you you stake on Binance launchpad, and receive tokens in return then this is considered an income, did I misunderstand?

You are absolutely right @forest, thanks. I’ve never been lucky enough to receive an airdrop so hadn’t noticed that this needed changing.