**UK Government Warns Crypto Users of Penalties for Unpaid Taxes**
In a bid to crack down on unpaid crypto taxes, the UK government is urging cryptocurrency users to come forward and disclose their capital gains or income related to digital assets such as cryptocurrencies, non-fungible tokens (NFTs), and utility tokens.
**Voluntary Disclosure Advised by HM Revenue & Customs**
An announcement published on Nov. 29 by the HM Revenue & Customs (HMRC) advised crypto holders in the UK to voluntarily report their unpaid capital gains and income taxes from digital assets in order to avoid potential penalties. The guideline emphasizes the importance of carefully assessing the extent of unpaid crypto taxes, with the number of years to disclose depending on the degree of compliance with previous tax notifications.
According to the guideline, holders who have taken “reasonable care” in managing their tax affairs will need to pay taxes for 4 years, while those who “did not take care” have to pay what they owe for 6 years. Meanwhile, individuals who “deliberately misled HMRC” will have to pay taxes owed over a maximum of 20 years.
**30-Day Deadline for Payment**
Once a disclosure is made, individuals are granted a 30-day timeframe to pay all outstanding taxes on digital assets. Failure to meet this deadline could result in repercussions, including actions taken by the Treasury to recover unpaid amounts.
**Planned Changes to Reporting Procedures**
As part of ongoing efforts to improve tax reporting requirements, the UK government intends to introduce a dedicated section in self-assessment tax return forms for cryptocurrency holders to disclose their gains. This change, expected to be implemented in the 2024-25 fiscal year, aims to streamline reporting procedures and enable tax officials to more effectively cross-reference customer information.
**UK’s Efforts to Regulate Cryptocurrency**
The UK aims to be a global hub for the cryptocurrency industry and has also announced its final plans for regulating crypto assets under the Financial Conduct Authority (FCA). Alongside tax regulations, this move is part of the UK government’s broader efforts to establish a comprehensive framework for the cryptocurrency sector.
Cryptocurrency users in the UK are encouraged to take heed of these warnings and ensure compliance with tax obligations related to their digital asset holdings in order to avoid potential penalties and repercussions.
I have been a full-time professional writer for over 10 years, and have written for some of the biggest publications in the world. My work revolves around cryptocurrencies and blockchain technology, and I am widely considered to be one of the leading experts in these fields.I have written two books on the subject matter, and my articles have been featured in major news outlets such as The Wall Street Journal, Forbes, and Huffington Post. In addition to writing, I also give talks and seminars on cryptocurrency investing, and am a regular commentator on CNBC, Bloomberg, and other financial news networks.
