Cryptocurrencies

(asked on 1st March 2022) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential impact of the use of cryptocurrencies on tax receipts to his Department.


Answered by
Lucy Frazer Portrait
Lucy Frazer
Secretary of State for Culture, Media and Sport
This question was answered on 7th March 2022

The Government is committed to retaining its global leadership position in fintech and to creating a regulatory environment that allows people to use innovative technologies reliably and safely, while protecting against the risks of them being exploited by criminals.

Businesses trading in or using cryptoassets are taxed on their trading profits. Where a person realises Chargeable Gains from increases in the value of cryptoassets, Capital Gains Tax (CGT) or Corporation Tax on Chargeable Gains may be due. If CGT applies, only Chargeable Gains above the Annual Exempt Amount are taxed.

Cryptoassets can be easily acquired and transferred, including across borders, and while the blockchain provides a transparent and immutable record of transactions, it does not usually record the identity of the owners of cryptoassets. HMRC has developed its capability to take advantage of opportunities that the blockchain offers for forensic compliance work in order to identify those that have failed to declare their gains. HMRC continues to actively monitor the compliance risks as the use of cryptoassets develops.

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