Taxman Demands Crypto Account Details

If you've ventured into the world of cryptocurrency, get ready for a significant shift: UK tax authorities are now automatically collecting your account details. As of January 1st, new rules mean that anyone buying or selling digital assets in the UK must share their transaction information with HMRC, or face potential penalties. This move marks a concerted effort by the UK's tax body to ensure investors pay their fair share, particularly capital gains tax, on their crypto earnings. HMRC will now automatically gather data from cryptocurrency exchanges – essentially the banking system of the digital asset world – as part of a drive to recover millions in unpaid taxes. For some time, HMRC has voiced concerns about widespread non-compliance among crypto investors. Experts suggest that these new regulations will make it considerably harder for those with substantial crypto wealth to conceal untaxed profits, providing tax authorities with far greater insight into user activity and transactions. The new framework, known as the Cryptoasset Reporting Framework (CARF), isn't just a UK initiative. It's being adopted by dozens of other nations, paving the way for easier international cooperation and information sharing between tax bodies. Exchanges failing to provide accurate, up-to-date accounts of their users' earnings could face hefty fines. HMRC estimates that thousands of UK crypto owners have outstanding tax bills, and they anticipate these new rules will bring in at least £300 million over the next five years. If you made any crypto gains during the 2024-25 financial year, be aware that you might need to file a tax return through a new dedicated section in the self-assessment form before January 31st. For those with undeclared gains from earlier years, HMRC is also running a voluntary disclosure facility to help taxpayers correct their affairs before April 2024. Beyond tax, the financial watchdog, the Financial Conduct Authority (FCA), is also stepping up its game. They are currently consulting on a raft of tougher regulations for the crypto industry, with proposals covering everything from preventing insider trading to setting standards for exchanges and rules around crypto lending and borrowing. This consultation runs until February 12th, signalling a clear message that the "Wild West" days of unregulated crypto are drawing to a close. The goal, according to the FCA, is to create a robust regime that safeguards consumers, fosters innovation, and builds trust in the burgeoning digital asset space. It's clear that accountability is now firmly on the agenda for UK crypto users and platforms alike. --- Managing your business finances? TaxAce provides smart online accountancy services for UK businesses with flexible monthly plans. Image and reporting: https://www.bbc.co.uk | Read original article