Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Mon, 22 Nov 2021 13:33:17 GMT by Adam
I am a regular person who just work full time and receive salary from my employer. My company fill all the tax documents for me and I've never had to do the self assessment. If I started mining crypto currency and it will be less than a £1000 in the tax year (for instance £400), would I still be able to continue to not do the self assessment? My understanding is that if the extra income from mining is less than a £1000, I don't need to report it. However I would like to know from the official source.
Posted Mon, 22 Nov 2021 15:10:21 GMT by HMRC Admin 17

Hi,
 
If this is done as a trade then you would not need to complete a tax return unless your gross profit is over £1000.

If this is not a trade and just for personal use then any gain would need to be reported for capital gains purposes if this is a taxable gain.

Thank you.
Posted Mon, 22 Nov 2021 16:13:17 GMT by Adam
What do you mean by referring to a 'trade'? Let's say I just use my personal PC a few hours a day from time to time for this. Is this a trade?
Posted Tue, 23 Nov 2021 12:21:17 GMT by Adam
Also, when you said "if this is a taxable gain" did you mean by this "only the gain amount above £1000"? As I understand everything below a £1000 is tax free. Am I right?
Posted Tue, 23 Nov 2021 14:38:29 GMT by HMRC Admin 29
Hi,

Please see the badges of trade for further guidance as to what qualifies as a trade

BIM20205 - Meaning of trade: badges of trade: summary

Thank you.
Posted Tue, 23 Nov 2021 20:07:21 GMT by Adam
This page: https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto21150 says "If the mining activity does not amount to a trade...will be taxable as income (miscellaneous income)...". In the first reply in this thread you said: "If this is not a trade... need to be reported for capital gains...". So my question is why that page says about 'income' and you says about 'capital gains' in therms of no trade? Which one is correct?
Posted Wed, 24 Nov 2021 15:56:20 GMT by HMRC Admin 17

Hi,
 
The cryptoassets manual covers gains made from cryptocurrency.

In the main terms this is subject to capital gains tax unless it is classed as a trade.

If you fall under the rules for mining activity that is not a trade then this can be reported as miscellaneous income. 

Thank you.
Posted Thu, 25 Nov 2021 14:02:13 GMT by HMRC Admin 28
Hi,

Yes, everything below £1000 would be covered by the self-employment allowance.

If this is not self-employment then the £1000 would not apply. 

Thank you.
Posted Thu, 25 Nov 2021 22:41:50 GMT by Adam
I am not sure this is correct. Where is the information that you must be self-employed to mine? On the HRMC phone service they told me that there is no need to open the company or to change anything. I can just work full time and as a hobby earn up to £1000 from mining. Over £1000 just do the self assessment and pay income tax from the amount above. Also no need to open the company to be self-employed.
Posted Mon, 29 Nov 2021 11:46:29 GMT by HMRC Admin 17

Hi,
 
Please see guidance here :

Cryptoassets Manual    .

Thank you.
Posted Mon, 25 Jul 2022 19:50:26 GMT by Matt mull
Hi there Was it ever established what constituted a "trade" (in simple terms) and if mining as a hobby falls into the category of miscellaneous £1000 or capital gain?
Posted Tue, 26 Jul 2022 12:46:12 GMT by HMRC Admin 17

Hi,
 
Please refer to guidance - CRYPTO20250 covers what is trading.

Under self assessment it is for the customer to determine if his activities amount to a formal trade.

Further information is found under BIM56800.

Mining is covered under CRYPTO21150 with further information on miscellaneous income at BIM100000:

CRYPTO20000 - Cryptoassets for individuals: contents   .

Thank you.

You must be signed in to post in this forum.