Tax Report for UK - is this point catered for on Koinly?

Does Koinly’s cover situation 2 below? This is from the HMRC website, and I can’t see how to figure out if my total sales exceed 4x the capital gains limit. Is this somewhere I can easily see on the website or calculate?

" There are two situations where you must file a return.

  1. Your total calculated profit in a single tax year is over the Capital Gains allowance (Currently £12300)

  2. Your total sales of capital assets exceeds 4x the capital gains limit (so, £49200). This means if you exchange £10k ETH to GBP and back 5 times in the year then you need to file a return, even if there was no profit. Of course, no profit = no tax to actually pay."

I think that means you need to complete tax report only. It’s the same for income +100k, you just need to complete the form even if you don’t have any tax to paid. If you don’t have any extra capital gains (+12300) you just skip that section. (I think…)
The problem is once you submit one report you need to send the report EVERY YEAR.

I don’t believe that is correct. Can someone from Koinly please try to answer my question? Many thanks.

Hi, yes the HMRC report on Koinly covers this - it contains a line “Disposal Proceeds” that will help you identify whether you need to report under scenario #2 in your question.
I asked the support team for a sample copy of the report (not real data) to ensure it covered this before I signed up for a paid plan to get the real report.

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Thank you for this. That’s perfect. It made me go ahead and buy the report. I’m shocked to see that my couple of months of trading has resulted in Proceeds from Sales of almost £1,000,000 and 2000 transactions. I’m playing with only a couple of thousand pounds, and it’s racked up that amount, despite breaking even. I guess this is because I’m just re-using the same cash in and out of various cryptos and each buy or sell is multiple partial buys or sells automatically.

Would HMRC class this as business levels of activity or whatever they would class to make you pay 40% income tax instead of the capital gains 20% if I do actually surpass the CGT threshold before tax year end? I’m very worried!

No worries! If you are worried I would certainly consult a tax professional to get their advice. However, the HMRC guidance does say “ Only in exceptional circumstances would HMRC expect individuals to buy and sell cryptoassets with such frequency, level of organisation and sophistication that the activity amounts to a financial trade in itself.”

So unless this is your full time job I would think it unlikely you would fall into the category of being a “trader”.

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Only other thing to add is to make sure any transfers between your wallets have been correctly categorised as transfers, not as separate sales/income.
I wouldn’t worry too much about completing the tax return - it’s pretty easy and if you can provide evidence that you have reasonably assessed your tax liability, if any (eg by using a Koinly report) then I doubt you’ll have any issues.

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