UK taxpayers will have to report cryptocurrency assets separately on their tax forms for the 2024-25 tax year, according to the recently announced Spring 2023 Finance Authority budget.
New criminal penalties planned by the UK government to combat tax avoidance
Amid turmoil in the banking sector following the collapse of Silicon Valley Bank’s UK subsidiary, Finance Minister Jeremy Hunt announced the spring 2023 budget on Wednesday. Hunt, who has been dealing with the bank’s collapse so far, told,The BBC reporter said that the closure of UK financial institutions posed no immediate danger to the UK financial system.Thebudgetis the Treasury’s announcement of the UK government’s decisions to “restore economic stability, support public services and lay the foundations for long-term growth”.
The budget also discusses tax and spending, specifically “tackling those who promote tax avoidance.” The UK government is planning to introduce new criminal offenses against those who engage in tax avoidance and will consult on this issue in the near future.” The government will also consult on speeding up the disqualification of directors of companies involved in promoting tax avoidance, including those who exercise control or influence over companies,” the Treasury budget states.
In addition, the Treasury document mentions amending the UK self-assessment form to account for cryptocurrency assets.” The Treasury notice explains that “the government will introduce changes to the self-assessment tax return form that require the amounts associated with cryptocurrency assets to be separately identified.” This change will be implemented on the tax form for the 2024-25 tax year.” In the UK, the deadline for self-assessment tax returns is January 31 of each year. UK taxpayers will need to submit their tax records using the Government Gateway Service and cryptocurrency assets will need to be listed separately under the new rules.
The U.K. Finance Minister and Treasury’s budget follows U.S. President Joe Biden’s recent annual budget for 2024, which also includes a tax plan targeting cryptocurrency investors. Biden’s budget aims to repeal the exchange-in-kind provision, also known as Section 1031, from the Internal Revenue Code. The presidential administration believes that closing the so-called loophole will prevent the “super-rich” from abusing the like-kind exchange provision.
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