**U.K. Government Cracks Down on Unpaid Taxes From Crypto and NFT Holdings**
*Tax Deadline Looming for Crypto Holders*
The UK government is taking a tough stance on unpaid taxes related to cryptocurrencies, non-fungible tokens (NFTs), and utility tokens. Cryptocurrency users in the UK are being urged to voluntarily disclose their capital gains or income from these assets or face penalties.
**Voluntary Disclosure Advised**
In an announcement made on Nov. 29, the HM Revenue & Customs is warning crypto holders in the UK to voluntarily report their unpaid capital gains and income taxes from digital assets to avoid potential penalties. This is part of the government’s efforts to tighten its control over unpaid crypto taxes.
**Assessing Unpaid Taxes**
According to the guidelines, crypto asset holders are being urged to carefully assess the extent of their unpaid crypto taxes. The number of years to disclose depends on the degree in which the individual has notified authorities or paid previous taxes. Those who have taken “reasonable care” in managing 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 that “deliberately misled HMRC” will have to pay taxes owed over a maximum of 20 years.
**30-day Deadline to Pay Taxes**
Those who have made a disclosure 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 the Treasury to recover unpaid amounts.
**Changes in Tax Reporting Requirements**
As part of the 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 planned 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 Aims to be a Global Hub for the Cryptocurrency Industry**
The UK government’s crackdown on unpaid crypto taxes comes as part of its broader effort to solidify the country’s position as a global hub for the cryptocurrency industry. In addition to tax regulations, the UK government has also announced its final plans for regulating crypto assets under the Financial Conduct Authority (FCA). This signals the UK’s commitment to creating a welcoming environment for the crypto industry while ensuring compliance with tax and regulatory requirements.
I’m a cryptocurrency and blockchain technology journalist. My work has been featured in major publications such as CoinDesk, Bitcoin Magazine, and VentureBeat. I’ve been a respected voice in the cryptocurrency community and my insights into the industry have helped shape its development.