UK Urges Voluntary Disclosure of Unpaid Crypto Taxes to Avoid Penalties

BySamson Ononeme

Nov 29, 2023 ,
UK Urges Voluntary Disclosure of Unpaid Crypto Taxes to Avoid Penalties

Key Insights

  • UK government urges voluntary disclosure of unpaid crypto taxes, before penalties and enforcement action
  • Applies to capital gains/income tax owed on exchange tokens, NFTs, utility tokens
  • Those who disclose have 30 days to pay before stringent recovery tactics commence

LONDON β€” The United Kingdom ramped up pressure on cryptocurrency users Wednesday, calling for people to voluntarily declare any outstanding tax obligations tied to Bitcoin, NFTs, and other digital assets before tougher clawback measures kick in.

Posting guidance on its website, the British government advised crypto investors and traders to come forward and pay owed capital gains or income taxes related to crypto exchange tokens, non-fungible tokens, utility tokens, and the like.

The tax authority said those submitting overdue tax revelations will have 30 days to settle the tab until stringent recovery tactics commence, which may entail penalties on top of the original liability.

The push comes as crypto-friendly Britain aims to mandate clearer reporting around the nascent asset class amidst growing regulatory scrutiny globally following high-profile exchange collapses.

Earlier guidance tried assisting crypto users in calculating complex digital asset tax obligations. But this marks an escalation in pressuring holders to pay outstanding dues or risk facing enforcement actions.

With crypto proving hard for understaffed agencies to track, officials hope alarming investors will encourage jumping ahead of the crackdown. But fears linger that overzealous tax pursuit may undermine innovation that made Britain a hub for Web3 development.

For now, the government emphasizes voluntary disclosure as the path of least resistance. However, the window for cooperative reconciliation may fast be closing for UK crypto tax avoidance.

Samson Ononeme

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