The United Kingdom, despite the fact that it is moving very rapidly towards the adoption of the cryptocurrency sector, has so far created a lot of problems for its citizens. Mainly due to tax returns, which seem excessively complex. There is hope, however, that this will soon change.
Tax revolution for cryptocurrency investors
The UK is making changes to its tax forms to introduce a separate category for cryptocurrency assets. According to an announcement published by the Treasury, this line should appear on the forms within the next few years.
These are steps toward developing a comprehensive cryptocurrency framework, which the UK is gradually introducing. According to a reporting document published by His Majesty’s Treasury, the change in self-assessment forms for cryptocurrency assets is a foregone conclusion.
Starting in the 2024-25 tax year, Britons will have to disclose their cryptocurrencies on their current tax returns. However, despite the introduction of this new category, the Treasury has yet to provide any concrete figures on the budget’s projected revenues from these assets. In the table of projected expenditures and revenues for the national budget, the line for cryptocurrency assets only appears from 2025-26, which may indicate that the government expects low revenues from this source. However, the increased awareness of cryptocurrency-related tax obligations that the introduction of a new category in the forms is expected to provide may help increase understanding and improve overall reporting.
Plans welcomed by cryptocurrency investors
The decision was welcomed by the Chartered Institute of Taxation (CIOT), which is the leading professional body that analyzes national tax policies. Gary Ashford, deputy president of the CIOT, commented on it, saying:
“Emphasizing the need to declare transactions of cryptocurrency as sets in the tax return will help raise awareness of people’s obligations in this area.”
At the same time, however, Ashford stressed the need for additional measures to “counteract widespread ignorance about tax payments and reporting requirements for cryptocurrencies.” According to him, cryptocurrency investors do not show enough understanding of the law in this regard.
Part of a greater plan
At the end of March, the FCA announced that it was still working on an ambitious restructuring plan to bring the regulation of financial markets in line with changing conditions. According to FCA officials, with the introduction of new financial regulations, the agency will be given additional regulatory powers over the cryptocurrency sector.
It was pointed out on this occasion that the main goal of the new regulations is to ensure the safety of investors, especially in the context of the growing popularity of cryptocurrencies.