Taxpayers in the UK will be required to report cryptocurrency assets separately on their tax documents for the 2024-25 tax year, according to the recently released Spring 2023 budget from the Treasury Department.
New criminal offenses planned by the UK government to combat tax avoidance
Amid chaos in the banking sector following the collapse of Silicon Valley Bank’s UK subsidiary, Finance Minister Jeremy Hunt delivered the spring 2023 budget on Wednesday. Hunt, previously dealing with the bank’s failure, said BBC reporters that the closure of the UK financial institution did not pose an immediate danger to the UK financial system. He budgetPublished by the Treasury, it looks at the decisions the UK government has taken to “restore economic stability, support public services and lay the foundations for long-term growth”.
The budget also looks at taxes and spending and specifically addresses “tackling promoters of tax evasion.” The UK government plans to introduce new criminal offenses for those who evade tax and will consult on the matter soon. “The government will also consult on expediting the disqualification of directors of companies involved in promoting tax avoidance, including those who exercise control or influence over a company,” according to the Treasury budget.
Additionally, the Treasury document mentions amending the UK self-assessment tax forms to account for cryptocurrency assets. “The government is introducing changes to self-assessment tax return forms that require amounts related to cryptocurrency assets to be separately identified,” the Treasury notice explains. “The changes will be implemented on tax forms for the 2024-25 tax year.” In the UK, self-assessment tax returns are due on January 31 of each year. UK taxpayers use the Government Gateway Service to file their tax records, and cryptocurrency assets must be listed separately under the new rule.
The UK Treasury and Finance Minister’s budget follows US President Joe Biden’s recently presented annual budget for 2024, which also includes proposed tax policies targeting cryptocurrency investors. Biden’s budget aims to remove the same-type swap provision, also known as Section 1031, from the Internal Revenue Code. The president’s administration believes that closing the so-called loophole will prevent the “ultra-rich” from exploiting the like-for-like swap provision.
What do you think of the UK and US governments’ proposed changes to tax policies regarding cryptocurrency assets? Share your thoughts in the comments section below.
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