Recap's tax report feature
Displaying how Recap's tax report feature works, what information it shows and what it looks like
Sun Sep 08 2019
Recap is cryptocurrency tax and accounting application that allows users to track their cryptocurrency finances and gain clarity on their tax position. All of this is done using end-to-end encryption, ensuring the user's privacy and security.
Within the Recap desktop app, users have the option to generate a UK crypto tax report for their Capital Gains Tax (CGT) return. This feature is currently only available to users who have a paid subscription. In the near future, we will be implementing a feature which allows users on the free tier (Launch Pad) to generate a tax report based on a small number of their transactions so that they can visualise the tax report and the information that it provides.
In the meantime, this article will describe how the Recap tax report is generated and show what it looks like when produced. I hope you find this useful!
How it works
Producing a tax report using the UK Tax page within the app is extremely simple when you have all of your data and accounts connected to the app. You must ensure that your entire cryptocurrency “journey” (journey = transaction details of all cryptocurrencies you have ever acquired or disposed of) is represented in the app in order to produce an accurate tax report. If some data is not included, the acquisition costs for your cryptocurrency pools may be skewed, making your tax return inaccurate. Therefore, you should include data of all cryptocurrency transactions.
Recap has some features which help users identify where data may be missing, however the onus is upon the user to ensure their data is present and correct. There is an intelligent matching feature in Recap's roadmap which will help users with this even more, by facilitating the tracing of cryptocurrency assets down to the satoshi.
Once you are comfortable that your cryptocurrency transaction history is accurate and displayed in the app, head over to the UK Tax page on the menu bar. If you are on a paid subscription, the interface below will be shown:
This page allows you to produce:
- An acquisitions report for all of your cryptocurrencies - This includes the pool values for each cryptocurrency you have ever held
- An in-app disposals report for all tax years where you have taxable disposals
- A downloadable PDF report for all tax years where you have taxable disposals
- Each of these reports are created using your in-app data and adhere to HMRC’s rules for cryptocurrency taxation in the UK. More information on these rules can be found in our comprehensive UK crypto tax guide.
The UK tax page also displays a capital gains summary for each tax year, showing the upper and lower boundaries of how much capital gains tax you may need to pay on your cryptocurrency disposals (we cannot give an exact figure as this depends on your capital gains and losses in the year from other assets, any capital losses from past years that could be used to offset these capital gains and your income. A feature which allows you to input this information and generate an exact “capital gains tax owed” figure is in the Recap roadmap).
This page also shows the net gain or loss for capital gains tax purposes as a result of your cryptocurrency disposals in that year. This can be particularly useful for individuals who have a taxable loss that they wish to claim with HMRC because they can use this taxable loss to offset future capital gains (very useful if you think a bull run is coming!).
The acquisitions report shows every acquisition of every cryptocurrency in your history (including forks, airdrops, income etc.). It details the amount of the cryptocurrency acquired, the value in GPB at the time of acquisition, the affect the acquisition had on the Section 104 Pool for that cryptocurrency and more. An example is shown below:
The acquisitions report can be useful for viewing your pool cost basis, the origins of your pooled tokens and which acquisitions were matched for same-day and bed and breakfasting disposals (Direct Match column).
In-app disposals report
The in-app disposals report is useful for viewing all taxable disposals across all cryptocurrencies that were made in the tax year which you have selected to generate the report for. It gives examples of the disposal type, the quantity of cryptocurrency disposed, the value of the cryptocurrency that was disposed in GBP, the price per token in GBP at which the cryptocurrency was disposed and the acquisition(s) that it was matched with for CGT purposes.
The in-app disposals report is useful for testing data and simulating disposals, such as attempting tax-loss harvesting before the end of the tax year (an automated tax-loss harvesting feature is in the Recap roadmap). An example is shown below:
PDF Capital Gains Tax disposals report
The PDF Capital Gains Tax disposals report is our pièce de résistance. This comprehensive report gives details of all disposals in the selected tax year for each cryptocurrency (including disposal date, identification, quantity of cryptocurrency disposed, cost basis of the cryptocurrency disposed in GBP, fees associated with the disposal in GBP, proceeds of the disposal in GBP and the gain/loss on that disposal in GBP), an overall summary of the assets disposed in GBP, a capital gains tax summary and more. Examples of these sections of the PDF CGT disposals report are displayed below:
As displayed above, the CGT disposals report gives the information required to submit a tax return for your cryptocurrency gains or losses. Additionally, the acquisitions report can be used to document acquisition and pooling costs if you are subject to a HMRC investigation. However, we advise that you take this report to your accountant and work through your cryptocurrency tax position with them before filing a tax return due to the irregularities associated with cryptocurrency taxation.
Here is an example PDF report that you can download and view:
Recap currently allows users to input their cryptocurrency income from taxable events and calculate the CGT due as a result of their disposal. In the near future, we will be including income tax functionality to our tax reports as well, due to multiple requests from users. We want Recap to be the all-inclusive cryptocurrency accounting platform for individuals, which gives you clarity on your tax position in minutes.
I hope this gives you an understanding of the value that Recap offers – We believe our pricing is fantastic value considering the accuracy of our tax engine, our privacy focus via end-to-end encryption and the time/money saved as opposed to doing these calculations manually/with the help of an accountant!
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