Play to earn and taxation from crypto profits

[markc939]

Hi,

My wife has been making a fair bit of cryptocurrency profit from play to earn blockchain games in recent weeks, she doesn't work (and so doesn't report any PAYE etc to HMRC)
and she makes nothing like her tax free limit from it, although it is a significant value.

Do I need to report this to HMRC? It's all her effort but the profits will be transacting through what is effectively a join account but its still just in my name.

So in summary, there is no tax evasion attempt, just need to know what i need to do to make sure we don't get stung.

Thanks in advance.
Mark.

[Jholm]

The income would be hers and (potentially) taxable on her, despite it being paid into a joint account.

There will be a question as to whether this is deemed self-employment or other casual earnings. I would suggest you look at the badges of trade and consider which you would deem it to be.

However, let's imagine it is deemed self-employment... If her annual turnover exceeds £1,000 it needs reporting to HMRC via a tax return. If it is below, the whole amount is covered by the trading allowance of up to £1,000 max.

I imagine she has little to no expenses? If so, you would deduct the £1k allowance in place of any actual expenditure.

Whilst her earnings may be below the £12,570 personal allowance, earnings over £1,000 will require a tax return. Also, be mindful that class 2 and 4 NICs might be due, subject to earnings being over the relevant thresholds.

Simple steps - register for self-assessment, log all income and expenditure and declare via tax return after the end of each tax year.