- The UK Tax authority is looking to keep up with the times.
- HMRC can already seize funds from bank accounts.
- FinTechs and crypto are next in the firing line for HMRC.
The UK is positioning itself as a crypto hub with a framework of regulations coming in the near future. HM Revenue and Customs (HMRC), the UK tax authority, is also looking to gain control over the digital asset space as part of these regulations.
HMRC is proposing regulations that would give it authority to take cryptocurrencies from the wallets of those that do not pay their crypto taxes.
Access to Wallets and Exchanges
HMRC already has the ability to seize funds from bank accounts of those who do not pay their taxes. This new proposal would offer similar authority for a modernizing digital age, with PayPal being another avenue it wants to exert authority over.
An HMRC spokesman told the Telegraph:
“The proposals will help ensure HMRC’s debt collection keeps pace with business practices. E-commerce means new business practices with fewer physical and owned assets held in the UK, which makes it harder for HMRC to collect unpaid taxes using existing powers."
In a consultation paper, HMRC is mulling over a way to ensure that crypto does not become an avenue to dodge tax. However, the authority is aware that decentralized wallets will be difficult to reach, but wallets kept on exchanges would be within their remit.
Law enforcement can already confiscate cryptocurrency from major exchanges and keep it as evidence; the seizing of funds by HMRC would be conducted similarly.
Made for Mainstream
As part of the consultation paper, HMRC is planning ahead and looking at the potential for crypto to go more mainstream.
“If further regulation is brought in around digital currencies, it may be that cryptocurrency wallets may become a more popular method of paying for goods and services,” an HMRC consultation document states.
On the Flipside
- In the U.S., President Joe Biden’s regime is looking to cut “tax loopholes that help wealthy crypto investors,” it was stated in a tweet from the POTUS account.
Why You Should Care
Tax regulation for crypto is an important step in the mainstream adoption of these digital assets. But, just as with general crypto regulation, there are many different ways to approach it.
Read more about Biden’s crypto tax plans:
Biden Targets Crypto Tax Loopholes. Community Left Confused.
Read more about Binance and its bid to be based in the UK:
Why Binance Is Betting on UK Base as U.S. Drives Crypto Away