Crypto tax rules will bring much-needed transparency to the market, experts say.
The Treasury’s announcement that it will be amending the cryptoassets rules in the Self Assessment system has been welcomed by experts as a step towards greater transparency in the market.
The new rules will require taxpayers to identify cryptoassets separately on their tax returns, which will give the Government a better understanding of who is holding cryptoassets and making gains from them.
Cryptocurrencies are already subject to taxes in the UK. The most common form of taxation is Capital Gains Tax (CGT) on any profits made from selling tokens. Income from crypto mining and staking is also treated as taxable income, which is reported on the SA form, alongside profits made from selling other assets, such as property and shares. This is sent to the UK tax department, His Majesty’s Revenue and Customs (HMRC).
The Government has announced that it plans to introduce new rules for the reporting of crypto assets in Self Assessment tax returns, in a move that is expected to raise an additional £10 million ($12.1 million) a year.
Mike Hodges, partner at the accountancy firm Saffery Champness, said that the move could help remind taxpayers that they need to be considering the tax position of their crypto holdings and help to avoid unnecessary taxpayer confusion.