UK Taxpayers Face Separate Profit Filings By 2025
- UK taxpayers will have to declare their profits from cryptocurrencies separately when filing their tax returns for the first time.
- The majority of British taxpayers do not file tax returns as their tax obligations are removed directly from their pay.
UK taxpayers will have to declare their profits from cryptocurrencies separately when filing their tax returns for the first time, the government announced on Wednesday. This move is part of the government’s plan to clamp down on tax evasion and close the tax gap, which it believes to be around £31 billion per year.
According to a statement released by the government, changes to the Self Assessment tax return forms will require amounts in respect of crypto assets to be identified separately. These changes will come into effect from the 2024-25 tax year, which will impact returns filed from 2025. The changes will affect those who need to complete forms, such as higher earners, the self-employed, and those with complex tax affairs or investment income.
The government expects the new requirement to bring in an additional £10 million ($12 million) per year from the 2025-26 fiscal year. The change is aimed at ensuring that individuals who invest in cryptocurrencies are paying the right amount of tax and are not evading their tax obligations.
The majority of British taxpayers do not file tax returns as their tax obligations are removed directly from their pay. However, tax authorities estimate that 12 million people were due to file this year.
The new requirement to declare crypto profits separately in tax returns comes amid a surge in the popularity of cryptocurrencies, with many investors attracted by the potential for high returns. However, there have been concerns that some investors may be using cryptocurrencies to evade tax or engage in illegal activities, such as money laundering.
The government’s move to require the declaration of crypto profits in tax returns is in line with similar measures taken by other countries, including the US and Australia. It is hoped that the change will help to ensure that the tax system remains fair and that individuals pay their fair share of taxes.
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