The tax deadline is 31st January that is looming, and HMRC has precisely stated that crypto holders will have a notable share.
So, now is the time to gear up for a self-assessment tax return.
Crypto holders have been receiving nudge letters around the UK where HMRC has clearly stated that Crypto holders need to appear for taxes on all kinds of crypto income, including capital gains. As a crypto holder, whether you have received the letter or not, tax is to be taken as a serious matter by all crypto holders.
Whether you are paying your tax for the first time in January 2022 or the round play, you still need to appear for crypto taxes. But, we ensure that you pay minimum tax and are on time.
UK Financial Year
The financial year of the United Kingdom goes around from 6th April of the current year till 5th April of the next year.
The tax that you would be filing now is actually for the previous year.
Being on time has many advantages. So, according to the tax laws, filing returns before 5th April is a must if you want to pay less because even a day beyond the current one would fall under next year tax returns.
Optimise your tax position before the End of the Financial Year
This step probably requires a better understanding of the UK’s tax rules. The UK has great tax breaks that can come into use while paying less tax.
Income Tax break in the UK
For your first Euro 12,570, you would not have to pay any extra taxes for that. The same goes for taxpayers in Scotland as well.
Trading and Property tax break in the UK
Back in 2017, the government introduced a trading and property allowance of 1000 Euros. There is a 2000 Euro allowance if your source of income is from trading as well as property.
You don’t need to disclose anything to HMRC if the revenue is less than 1000 Euros.
Capital Gain tax break in the UK
A tax-free allowance of 12,300 Euros annually is granted in the United Kingdom. Any gains under 12,300 Euros would not be eligible for a capital gain tax. And it is a significant sum for all crypto holders.
What are other ways to optimize the crypto tax?
- Gift Crypto this season to your partner or friend
- All the income tax brackets mentioned above can be utilised to it’s fullest
- Set your capital gains against your capital losses.
- Tracking of gains and losses that were unrealised
FinBridge is your accounting partner, enabling you to bring finance functionality within your business premises. Avail our tax and accounting services now!