By: Eliza Bennet
The UK government has revised its stance on cryptocurrency taxation, implementing a structured procedure for reporting and paying any unpaid crypto-related taxes. According to the latest publication of HM Revenue & Customs, entities and individuals dealing with cryptoassets must adhere to these specific guidelines to fulfil their tax obligations and report any previously unpaid digital asset taxes. This move underscores the government's focus on crypto, including NFTs (non-fungible tokens), exchange tokens, and utility tokens.
The guidelines also provide a method to calculate the extent of unpaid taxes. The taxpayer's diligence and care regarding their tax affairs influence the years they must report—from four years in cases of 'reasonable care' to twenty years for those who 'deliberately misled HMRC.' HMRC’s guidance emphasizes paying due taxes within 30 days of disclosure. Delay in payment can lead to penalties and interest charges.
The HMRC aims to integrate cryptocurrency transactions into the mainstream taxation framework with these updated guidelines. They represent the widespread trend of regulatory bodies globally working towards establishing strict tax norms for digital assets. The guide advises taxpayers unable to pay the total owed amount to communicate immediately upon receiving the payment reference number, providing detailed financial information to facilitate a potential new payment arrangement.
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