- The UK government’s damaging U-turn on welfare reforms means that tax rises are a possibility.
- The crackdown on crypto tax dodgers is expected to raise up to £315 million by April 2030.
The UK government is planning to tighten the regulations on crypto traders and investors by bringing in a new tax compliance that will require users to provide identifying information to exchanges and platforms.
The initiative is part of the Cryptoasset Reporting Framework, which is aimed at boosting tax transparency.
It would also help His Majesty’s Revenue and Customs (HMRC) track down undeclared profits from assets such as Bitcoin [BTC] and Ethereum [ETH].
Under the new rules, crypto traders could face fines of up to £300 if they fail to provide identifying information to the crypto service providers they use.
This move would align the UK regulations more with the US, and away from the EU.
The government expects the rules to raise up to £315 million by April 2030. The fines target non-compliant individuals as well as service providers.
Current rules require crypto holders to pay capital gains tax on profits, but reporting gaps mean that tax enforcement is not thorough.
Further and faster crackdown on crypto tax dodgers
Exchequer Secretary to the Treasury, James Murray MP, said,
“We’re going further and faster to crack down on tax dodgers as we close the tax gap.”
The minister stressed that the comprehensive reporting was designed to ensure that tax dodgers would have nowhere to hide. It would also help raise the revenue needed to fund nurses, police, and other vital public services.
These measures came at a time when Chancellor Rachel Reeves refused to rule out the possibility of tax increases in the future.
The UK government’s U-turn on welfare reforms meant that the Chancellor has publicly stated that it would be irresponsible of her to rule out further tax rises.
Crypto users were not enthused by the new regulations. One Twitter denizen questioned whether this was smart regulation or total surveillance on their finances.
Others opined that this would affect CEXes in the long term, driving out crypto businesses from the country.
