An ‘interesting report’ by the Treasury Select Committee published today.
They have stated in their report that cryptocurrencies have “characteristics closely resembling gambling”.
There is plenty to unpack there.
Of course, anyone who has witnessed the recent meme coin explosion / implosion (you all know PEPE, right?) would perhaps sympathise that some elements could rightly be compared to a casino.
But this is hardly representative of bitoin let alone the wider industry.
Does the risk that one can lose their entire investment mean it is gambling?
I think the sensible view is no.
As a myopic tax adviser, this does bring back memories of the old calls where you would have a lively discussion with a potential client over whether cryptoassets were gambling or not.
Of course, gambling winnings are not taxable and losses are not allowable.
This might seem like wishful thinking, particular these days.
However, there is one surprising culprit who must share the blame for this largely historic view (it still pops up now and again).
Back in their original 2014 guidance, HMRC set out the following extraordinary statement:
“Depending on the facts, a transaction may be so highly speculative that it is not taxable or any losses relievable.”
“Depending on the facts” is doing a lot of heavy lifting here.
But HMRC guidance has moved on significantly since then and they should be credited for attempting to get to grips with cryptoassets.
To my knowledge, they are head and shoulders above other authorities and this provides some power to the UK’s elbow in attempting to become a world leader in the field (of course, the TSC’s report does quite the opposite).
So, other than in some exceptional scenarios, the gambling thesis was exorcised some time ago…
…however, perhaps the Treasury Select Committee report supports this view!*
*Disclaimer alert – I am not suggesting it does. Just pointing out how daft they are*
If you have any queries about this article (Is crypto gambling?), or crypto tax matters in general, then please get in touch.