Crypto assets to become a separate category in UK tax forms

Regulation

As the United Kingdom gradually develops its own comprehensive crypto framework, His Majesty’s Treasury is introducing a separate category for crypto assets in tax return forms. The particular line should appear in tax forms in 2024–25.

On March 15, the U.K. Treasury published a report paper on the national budget for Spring 2023. The document announces the amendment of the self-assessment forms for crypto assets.

In the table of anticipated expenses and revenues of the national budget, the crypto assets line appears only from 2025–26. That means British citizens would have to declare them for the first time in the previous tax year — 2024–25. Currently, the Treasury doesn’t provide any specific numbers of anticipated budget revenues from this tax category — the numbers in the table stand at the nominal mark of 10 million British pounds ($12 million).

Related: UK banks HSBC, Nationwide to ban crypto purchases with credit cards

The changes were welcomed by the Chartered Institute of Taxation (CIOT), the leading professional body that analyzes national tax policies. Gary Ashford, the deputy president of the CIOT, stated:

“Highlighting the need to declare crypto asset transactions in the tax return will help raise awareness of people’s obligations in this area.”

However, Ashford highlighted the need for additional measures to counter “widespread ignorance of tax payment and reporting requirements for crypto.” According to Ashford, it is law-income crypto investors who don’t possess sufficient understanding of tax reporting.

Earlier in March, the Financial Conduct Authority (FCA) reported to the Treasury that it is “midway through a quite ambitious reset” as the Financial Services and Markets bill passes through the Parliament. When passed, the bill would give the FCA new regulatory powers over the cryptocurrency industry.