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Posted Mon, 01 Apr 2024 19:16:41 GMT by Nico Fdz
Hi team, I am an individual contributor and I'm currently on 257T tax code. I want to invest around £20-30k to buy machines to mine bitcoin and other crypto assets. I will buy them in the US and I will host them with a hosting company, to make sure they can be fully running and get support/maintenance. I will have electricity bills every month. I've read multiple articles from the crypto assets guide (https://www.gov.uk/guidance/check-if-you-need-to-pay-tax-when-you-receive-cryptoassets) and it's not clear if you actually invest a lot money and the computers are only for mining crypto. I understand if you use your current computer to mine crypto and work, entertainment. Also, I want to understand in what case it could be consider as Capital gain tax (lower taxes than Income tax). How much trading I should do in order to be consider as trader? The reason I'm asking is that the machines cost around £10k each, they cost around £150 per month to run on electricity and if I can use the invoices of the purchase of the machines and the bills against the income received (crypto awards), that I need to sell daily. Then I will be taxed 45% of every £1 I receive from mining without being able to deduct the expenses. If you see any case where I can deduct those expenses, then the whole side project could make sense to invest in it. Thanks!
Posted Tue, 09 Apr 2024 11:48:27 GMT by HMRC Admin 32 Response
Hi,

Please refer to guidance at:

Cryptoassets Manual

Thank you.

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