The Business Exchange Swindon & Wiltshire Edition 62: August/September 2022 | Page 31

FINANCE

PLAN FOR UK TO BECOME ‘ GLOBAL CRYPTOASSET HUB ’ MET WITH SCEPTICISM

Former Chancellor Rishi Sunak ’ s ambition to make the UK a ‘ global cryptoasset hub ’ has not won the confidence of tech experts , according to a new survey conducted by Swindon-based BCS , The Chartered Institute of IT .
A majority of 58 per cent of IT specialists felt the profession should not support the Treasury ’ s plan to make Britain a global centre for cryptoasset technology and investment , including stablecoins and NFTs .
Just 29 per cent said working technologists should get behind the crypto project . The remaining 13 per cent were neutral .
Only 14 per cent of tech experts surveyed said the former Chancellor was right to ask the Royal Mint to launch an NFT this summer .
The large majority ( 77 per cent ) were not confident that another key part of the plan , recognising and regulating stablecoins , would ‘ ensure financial stability and provide wider consumer payment choice .’
Stablecoins are a form of cryptocurrency usually pegged to another asset or currency such as Sterling .
Most information technologists ( 69 per cent ) told BCS that the public could not have
the same level of confidence in stablecoins as in commercial bank money .
A similar proportion ( 63 per cent ) said the Bank of England should not guarantee stablecoin to cover possible risks .
Some 68 per cent of tech specialists said it was wrong for the Royal Mint to launch its own NFT this summer , as asked by the former Chancellor .
Just 10 per cent of tech experts were optimistic about the potential of NFTs to do good for society , the BCS poll found .
In contrast , 41 per cent said they were positive about the potential of blockchain technology to benefit people , securing transactions in areas from health to contracts .
Energy consumption and impact on climate change ranked as the biggest concern IT experts had about the wider adoption of crypto ; 23 per cent selected this as top priority for government to consider before wider rollout of the technology .
This was closely followed by the prevalence of money laundering and ensuring the safety of crypto wallets and exchanges ( both 15 per cent ), then regulation and educating the public ( both 14 per cent ).
In comments supporting the poll , tech experts commonly said that encouraging speculation in cryptocurrency and NFTs was reminiscent of pyramid or Ponzi schemes , which should be avoided by the public and policy makers .
Dr Bill Mitchell OBE , Director of Policy at BCS , The Chartered Institute for IT said , “ Technology professionals we polled were deeply sceptical as to whether the UK can and should become the sort of country that attracts investment in crypto products – even stablecoins pegged to a currency . They were especially wary of encouraging people to start using cryptocurrency without the education and regulatory framework to create trust and confidence .
“ In particular , the coming launch of the Royal Mint ’ s NFT needs to avoid striking a bum note at a time of spiralling cost of living and industrial action .
“ IT specialists are more optimistic about the potential of blockchain to be applied for social good , for example in areas where it might assure trust and transparency like healthcare records and ‘ smart contracts ’ that can give all parties confidence .
“ In general , technologists would sooner work with government on areas like Artificial Intelligence , cyber security and levelling up access to basic digital skills , which really do have the potential to transform lives , rather than crypto .”

INVESTING IN CRYPTO OR NFT ? KNOW THE TAX IMPLICATIONS

by Ian Lloyd , Partner and Head of the Bath office of Milsted Langdon which works across Swindon and Wiltshire
ADVERTISING FEATURE
Millions of investors across the UK are believed to own some form of cryptoasset .
The boom in Non-fungible Token ( NFT ) and cryptocurrency investments in recent years means that many investors , miners and traders have additional taxable income , which needs to be reported .
If you own , produce or sell cryptoassets , like Bitcoin or Ethereum , then you must understand the tax implications of your online activity .
You could be accruing considerable liabilities due to your income and gains from cryptoassets that could result in a significant tax bill or a tax investigation .
How are cryptoassets taxed ? Many different factors go into the taxation of cryptoassets , but how you derive an income from NFTs or cryptocurrencies is most likely to determine how HM Revenue & Customs ( HMRC ) decides to tax you and the size of your potential bill .
• Investors – Most ‘ amateur ’ investors will only pay tax on the gains that they make from the sale of their investments each year under the Capital Gains Tax system .
• Miners – Income from mining is treated via the income tax system , rather than the gains you make on the sale of the assets you create .
• Traders – If you trade professionally then your returns are most likely to be taxed via income tax .
If you are involved with the cryptoasset markets , whether as a part-time amateur investor or a long-standing crypto trader , you must not only report your income or gains correctly via self-assessment but also pay the correct amount of tax .
There may be steps to mitigate the amount of tax that you pay depending on allowances and other reliefs available to you , so it is best to seek advice beforehand .
Staying compliant HMRC has become increasingly interested in the activities and income of cryptoasset investors , miners and traders in recent years .
It has been conducting several campaigns , including sending thousands of ‘ nudge letters ’ to those involved in the cryptoasset industry , to ensure they are reporting their income and gains correctly .
Many of the crypto trading platforms are based overseas and so a failure to disclose information may leave some UK taxpayers exposed to the punitive penalty regime associated with offshore evasion , which can result in penalties of up to 200 per cent of the under declared tax .
Make sure you calculate the tax owed and complete your tax return accurately , including making disclosures on previous income .
Seek professional advice to remain compliant with the changing tax rules surrounding cryptoassets to gain a deeper understanding of how your activities online affect your tax position .
Do you need help with the tax implications of your cryptoasset activities ? Get in touch with our tax team to see how we can help . Visit milstedlangdon . co . uk
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