Starting from the 2024/2025 season, tax forms in the United Kingdom will contain a section for investors to declare their crypto investments. Chancellor of the Exchequer, Jeremy Hunt, revealed the policy in the annual budget on Wednesday after the House agreed to the changes.
According to the budget amendment, the British government will employ these changes on tax forms, which it expects to yield up to £10 million ($12 million) for its treasury. Before now, users would typically declare crypto investments under an "Other UK income" section on relevant tax forms.
The United Kingdom already belongs to a long list of countries that profit from increasing cryptocurrency adoption. The UK has a 20% capital gains tax for crypto owners over the £12,300 tax-free allowance. Britain's personal income tax on crypto assets is between 20% and 45%.
Move Aims to Close Tax Avoidance
By attaching a dedicated self-assessment form for crypto investors, Her Majesty's Treasury aims to reduce tax avoidance in the country while making it easier to track taxpayers' assets. The form changes, however, are for capital gains tax and will be payable when investors realize profits from exiting their investment position.
"The government is introducing changes to the Self Assessment tax return forms requiring amounts in respect of cryptoassets to be identified separately," the report stated.
The UK government, in the past, has made efforts to keep taxpayers accountable for their crypto gains. Her Majesty's Revenue and Customs (HMRC) sent strict compliance checks to crypto holders in Britain, aiming to improve the growing tax boycott. The firm also added rewards from crypto staking and mining as taxable gains.
Crypto Relevance Keeps Surging
Including a tax declaration section for UK cryptocurrency investors is a milestone for the industry's efforts to go mainstream. There are over 30 million taxpayers in the UK who will now receive tax forms with a dedicated section for reporting crypto investments.
Her Majesty's Treasury's expectation of £10 million in revenue from crypto investors also provides additional incentive for the region to create favourable regulation for the industry. Reports suggest that over 20% of Brits invest in cryptocurrencies, which is expected to rise in the coming years.
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