Crypto Bookkeeping

How our Accountants can help you!

• Crypto Bookkeeping Best Practices

  Understanding and complying with UK crypto regulations is critical to the success of any UK business that is involved in crypto. Defining exactly how to execute a crypto bookkeeping strategy, however, is complicated. There is no benchmark process for crypto bookkeeping however we have provided the core actions to consider when you are approaching crypto bookkeeping.

  Track Your Expenses

  Keep track of every crypto related transaction or expense. This will most likely be time consuming on the day to day but can save a significant amount of time and confusion when it comes to reporting. There are several platforms that can be used to help automate or simplify this data collection process such as Xero.

  Also consider documenting all crypto related invoices through invoice management tools. UK businesses that transact in cryptocurrency should track both fiat and crypto transactions, then create consolidated reports that cover both. For individuals or businesses that manages multiple wallets and exchange accounts should collect all transaction, base rate, and price data, then consolidate this data by converting values to fiat either manually or with a reporting software.

  Ensure You Are Tax Compliant

  The cryptocurrency industry is dynamic and ever-changing, so it’s important to stay on top of the latest changes in regulation. The UK’s regulatory landscape can change quickly — if you’ll need to be regularly about any updates in order to remain compliant.

  Consider Online Bookkeeping Tools

  There are many different tools that integrate with cloud-based accounting platforms such as Xero to streamline the crypto bookkeeping process. While it’s possible to manually enter data when reporting crypto transactions, the scale of trade and activities in a business can makes this task highly intensive if not nearly impossible.

  Crypto reporting software that integrates with cloud accounting tools can significantly reduce the amount of time it takes to collect, classify, and input data manually, as well as eliminate the potential of user error.

• Crypto Bookkeeping Checklist

  A crypto bookkeeping strategy for any UK business that transacts in cryptocurrency should cover the following tasks:

  • Record and track every single crypto related expense and transaction
  • Convert all crypto transactions into fiat currency
  • Consolidate both fiat currency and cryptocurrency across all exchange accounts and wallets
  • Consistently monitor and assess asset performance, crypto wallet balances, and daily activities
  • Compile wallet balances and bank accounts on a regular basis
  • Regularly update critical financial reports such as P&L statements, balance sheets, and cash flow statements

  On top of this there should be a proactive approach to keeping informed of any UK regulatory changes in regards to crypto.

• Why You Should Hire A Crypto Accountant

  Cryptocurrency bookkeeping can get complicated but following our bookkeeping best practices can help. If your business currently transacts in cryptocurrency and you’re not sure about your tax or reporting obligations, reach out to MJ Kane for a bespoke and comprehensive guidance today. You can find out more about our crypto tax accountants services, or by arranging a consultation with our team on the form below. Alternatively, for urgent queries please call us at: Tel: 028 9335 0290

• What Should I Expect With MJ Kane’s Initial Crypto Tax Consultation

  At M J Kane, we can provide assistance with ensuring that crypto transactions are tax efficient and advising on the implications of crypto asset activities. Outside of crypto, MJ Kane offers a comprehensive bookkeeping service for personal individuals, small businesses and limited companies.

• What is included in my 15-minute advisory phone call

  During your advisory phone call you will be in a position to ask one of our Crypto Tax Specialists any questions you may have regarding tax advice and crypto currency.
  You will be provided with bespoke advice unique to your circumstances.
  The call will include advice on tax planning and tax saving to ensure that you get the best savings out of your investment.
  You will be provided with a report based on the phone call detailing the advice our specialist recommends.
  This call will be more than a consultation and will provide you with bespoke, exact tax advice unique to your situation.
  You can book a 15-minute conversation with one of our Experts now!

• Do I need to report my Cryptocurrency on my taxes

  Yes, your cryptocurrency is taxable. HMRC considers cryptocurrency holdings to be a taxable income. The rate your currency income is taxed on will vary depending on the way you receive the income.

• Are paper gains taxable?

  Unrealized gains. Gains that are “on paper” only are called “unrealized gains.” For example, if you bought a virtual asset for £10 and it’s now worth £12, you have an unrealized gain of £2. You won’t pay any taxes until you sell the asset or transfer it.

• Can HMRC track Crypto?

  HMRC may investigate your tax affairs if you have invested in cryptoassets, cryptocurrency, and virtual currencies such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Monero (XMR), Zcash (ZEC) and Ripple (XRP).

• Are There Crypto Tax Reporting Softwares and Tools in the UK

  There are numerous cryptocurrency tax softwares available in the UK and accurately consider UK tax consideration. Koinly Crypto Tax Software is strong consideration for being one of the most user friendly and easy to use crypto reporting tools.

• Other Crypto Resources You Might Be Interested In

  At MJ Kane, we pride ourselves in the years of industrial expertise within the crypto sphere and UK tax. Delivering award winning services to thousands of businesses and individuals across the globe. Learn more about other crypto tax guides and services.

  • What Are Crypto Accountants in The UK?
  • Crypto Tax Advice For Individuals
  • Crypto Tax Advice For Companies
  • How Is Crypto Taxed in the UK?
  • Koinly – Crypto Tax Tool