Quitting day job to trade crypto - need advice as to what path to take from here
- Thread starter BeardedNomad
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I'm not sure that HMRC are super-strict on this. Income tax can be higher than cap gains, but if they class your trading as self employment then you can make lots of deductions. I think the real cost is accountancy cost, time lost to bureaucracy and lack of sleep.
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim56830https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim20200
Ignoring your intent for a minute, what kind of timescales are you talking? Buy coins you like and HODL them for months or more? Or 00s or 000s of small trades per day?
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim56830https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim20200
Ignoring your intent for a minute, what kind of timescales are you talking? Buy coins you like and HODL them for months or more? Or 00s or 000s of small trades per day?
I trade Futures via Binance and make a couple hundred trades each day, this will increase over time with compounding returns.
I have been using Koinly.io to pull my trading data via API and give me a rough idea of totals/gains etc as I go. My plan was to use TaxScouts.com to review this data fully and file at the end of the year tax year, however I do not know if they will "offer up" advice to maximise my taxes or︀ they do the minimum for the fee.
I have never used an accountant before and︁ whilst search/reviewing for best advice, the word "avoidance" and "evasion" seem to be viewed as︂ synonymous with one another. Just to clarify, I do not wish to evade, however my︃ morals have no issue with avoidance and in turn minimising my taxes as much as︄ legally possible. I have paid my taxes for almost thirty years, never been unemployed and︅ never asked anything from anyone, now its time I start looking out for myself. I︆ am more than happy to squeeze every last penny that I can out of the︇ tax man.
I have been using Koinly.io to pull my trading data via API and give me a rough idea of totals/gains etc as I go. My plan was to use TaxScouts.com to review this data fully and file at the end of the year tax year, however I do not know if they will "offer up" advice to maximise my taxes or︀ they do the minimum for the fee.
I have never used an accountant before and︁ whilst search/reviewing for best advice, the word "avoidance" and "evasion" seem to be viewed as︂ synonymous with one another. Just to clarify, I do not wish to evade, however my︃ morals have no issue with avoidance and in turn minimising my taxes as much as︄ legally possible. I have paid my taxes for almost thirty years, never been unemployed and︅ never asked anything from anyone, now its time I start looking out for myself. I︆ am more than happy to squeeze every last penny that I can out of the︇ tax man.
this topic is about crypto yet you talk about futures? that is completely different ballgame(more/better options).
ok, i just read up on it(i ignored it altogether). it's all legal and it is taxed under capital gains tax as any other security. in that case you are seeking the same thing as i do so maybe i will direct you here Stock market investors, where you at?
There's a lot of good information there, you have clearly done your homework. I'll read through it a couple of times and digest it. Thanks.
Avoidance is where you buy the maximum amount of booze or cigarettes in the duty free shop, to legally reduce your tax. Evasion is where you smuggle some additional product illegally. The difference is just whether you used the rules, or broke them.
Given that you make 00s of trades per day and will be leaving your job to do this full time, I think the statement that "it is taxed under capital gains" is dangerous.
Depending on which type of futures, you should look into︀ whether it could be untaxed as gambling, rather than trade or investment (three different tax︁ approaches, for similar transactions). I think you need a specialist UK accountant or tax lawyer.︂ Assuming you started this before April 6, you can use your 2020-2021 tax year to︃ find out where you stand.
I'm a little confused though. FCA banned the sale of︄ CFDs, options and futures to UK retail customers from 6 January 2021.
Given that you make 00s of trades per day and will be leaving your job to do this full time, I think the statement that "it is taxed under capital gains" is dangerous.
Depending on which type of futures, you should look into︀ whether it could be untaxed as gambling, rather than trade or investment (three different tax︁ approaches, for similar transactions). I think you need a specialist UK accountant or tax lawyer.︂ Assuming you started this before April 6, you can use your 2020-2021 tax year to︃ find out where you stand.
I'm a little confused though. FCA banned the sale of︄ CFDs, options and futures to UK retail customers from 6 January 2021.
You're right, it came into effect a few months back, but as far as I understand due to Binance being located in Malta, it does not apply to them and as long as tax is paid, then the UK won't intervene. Binance did close down their new "Binance Jersey" offering, which many believe was to ensure the UK could not compel them to block Futures etc.
Noted and thank you for the advice,︂ it is appreciated.
Noted and thank you for the advice,︂ it is appreciated.
Few things:
1. I strongly second the "wait until you are profitable long-term before giving up the day job" advice.
2. AIUI derivatives (CFDs etc) are still available to UK customers so long as they register as a "professional". IG Index are eager for me to do this and their site keeps asking me to...
3. Everywhere has an Expats group on Facebook and they are very good for finding contacts, seeing what the day-to-day hassles people have there are, getting a little bit of a feel for the place.
There is definitely a "crypto tax exile" community in Malta (Adam Back, for one!). Property︀ prices there, if you want something decent, might be a bit of a shock.
It's worth having a look at how different places have responded to Covid as this can︁ seriously impact quality of life and is a useful sign for how knee-jerk brutal they're︂ likely to be in future! UK imprisoned everyone for months; Malta has an outdoor mask︃ mandate, which is asinine but better than house arrest, for example.
1. I strongly second the "wait until you are profitable long-term before giving up the day job" advice.
2. AIUI derivatives (CFDs etc) are still available to UK customers so long as they register as a "professional". IG Index are eager for me to do this and their site keeps asking me to...
3. Everywhere has an Expats group on Facebook and they are very good for finding contacts, seeing what the day-to-day hassles people have there are, getting a little bit of a feel for the place.
There is definitely a "crypto tax exile" community in Malta (Adam Back, for one!). Property︀ prices there, if you want something decent, might be a bit of a shock.
It's worth having a look at how different places have responded to Covid as this can︁ seriously impact quality of life and is a useful sign for how knee-jerk brutal they're︂ likely to be in future! UK imprisoned everyone for months; Malta has an outdoor mask︃ mandate, which is asinine but better than house arrest, for example.
I wouldn't recommend quitting your job for crypto trading.
My suggestion to you:︅ Buy BTC with the money you have and will not need you for at least︆ 10 years. Do not follow BTC prices in 10 years. So forget your cryptocurrency. Begin︇ BTC price tracking 10 years later. Sell BTC at the most profitable time for you.︈
I followed this plan and multiplied my money 25 times.
My suggestion to you:︅ Buy BTC with the money you have and will not need you for at least︆ 10 years. Do not follow BTC prices in 10 years. So forget your cryptocurrency. Begin︇ BTC price tracking 10 years later. Sell BTC at the most profitable time for you.︈
I followed this plan and multiplied my money 25 times.
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