Lincoln-based cryptocurrency startup Recap, which aims to take away the headache of working out your tax position based on money earned (or lost) when trading cryptocurrency, has officially launched its UK app.
The app, founded by Dan Howitt and Ben Shepheard tracks trades with cryptos such as Bitcoin and Ethereum amongst thousands of others; all whilst maintaining absolute privacy.
Dan and Ben have been involved in the cryptocurrency industry since 2013 and helped to define the UK’s regulatory position on cryptocurrencies and after 18 months of development, an Innovate UK grant and a pre-seed fundraising round, have released version 1.0 of Recap.
Cryptocurrencies are capital assets in most tax jurisdictions. Therefore, all disposals are taxable events – even cryptocurrency to cryptocurrency transactions, such as exchanging Bitcoin for Ethereum.
Dan said: “30% of cryptocurrency users in the UK do not know that cryptocurrency to cryptocurrency transactions are taxable events. We have even seen cases where users have tax liabilities greater than their current portfolio values.”
In December 2018, Recap won an Innovate UK grant for £135,000 and recently expanded its team from two to five employees, as well as moving offices from Sparkhouse in Lincoln to Think Tank on Ruston Way.
CTO Ben Shepheard said: “We are delighted to finally bring our solution to the market. There has been a lot of demand from users for the full release following the success of our private beta.”
The release comes as Bitcoin’s price has more than tripled since the start of 2019, a factor that could result in more demand for their product.
“The leading cryptocurrency news outlet CoinDesk recently reported on an impending HMRC cryptocurrency tax crackdown – HMRC said it was withholding details about its demands for information (from cryptocurrency exchanges) since disclosing them could jeopardize the assessment or collection of tax.”
Dan explained how the Recap desktop application works: “Users download our desktop application and link to the cryptocurrency exchanges and wallets that they use via read-only API connections.
“The platform automatically extracts the transaction data, historically prices transaction values and calculates the tax position for the user. All of this is done using end-to-end encryption (similar to WhatsApp).”
Ben added: “The security and privacy focus of Recap is extremely important due to the permanent nature of cryptocurrency transactions. We believe individuals should own their data.
“You often hear about high net worth cryptocurrency investors being forced into sending their cryptocurrency to a criminal’s wallet – an irreversible process. Therefore, the fewer people who are aware of your cryptocurrency activity, the safer you are.
“None of the current solutions offer this level of security and privacy.”
Currently, the company is expanding the number of exchanges that it fully supports, starting with Coinbase Pro and Binance, and is also integrating US specific tax rules.
Finally, Dan added: “We want our community to let us know what would be most useful to them, so if you want to help us out with that head to our twitter: @recap_io”.