Hi Medardo and Matt,

I too face this situation as a HEXican, but I decided to consult with a UK professional Chartered Accountant, as the consequences of getting it wrong can be very costly in HMRC penalties, fines and then paying the correct amount of tax (if it is greater). And any errors in calculation could compound over many years going forwards, leading to a nightmare of going back and correcting any mistakes.

The accountant told me that the use of the term ‘interest’ in respect to HEX staking rewards is incorrect. The UK HMRC does not recognise crypto assets as cash, so the term interest is invalid. HMRC treats HEX staking rewards as ‘miscellaneous income’.

The problem is that the taxable value of the income must be calculated in Pounds Sterling, so you have to also consider the HEX/GBP rate.

You also have to calculate the taxable income on the same frequency that it is awarded - i.e. daily for HEX stakes.

Now, because the HEX contract does not have an API, you have no choice but to manually retrieve the number of HEX gained daily, and maintain a manual spreadsheet of the HEX awarded, and convert it into GBP income using a historical HEX/GBP data source such as Coinmarketcap.

The next problem is that when you sell the HEX you have to work out the cost basis for the Capital Gains Tax calculation, and this cannot be calculated correctly by just using the transactions that happen in Metamask, that are being picked up by the Accointing software.

You can probably do all these manual income and CGT transactions using the manual template form that Accointing provides, but for me, this is a step too far, and it is not why I subscribe to Accointing. I use Accointing because it should be simple, quick and non labour intensive. Also it is just too risky to get it wrong. So I have decided that it is safer and easier to keep a spreadsheet record and let the accountant sort it out (for a substantial fee of course !).

If Accointing wishes to challenge the conclusions that my Accountant makes about the HEX staking, I am happy to put any counter arguments to him, so I would welcome any feedback.

Thanks.