News

UK Crypto Users Face New HMRC Tax Compliance Demands

UK HMRC targets crypto users for tax compliance and mandates declaration and payment within strict timelines.
Published by
UK Crypto Users Face New HMRC Tax Compliance Demands

In a significant move by the UK’s tax authority, Her Majesty’s Revenue and Customs (HMRC) has issued a firm directive to cryptocurrency users. This announcement, which has critical implications for UK crypto hodlers, centers on declaring and paying taxes on digital assets within a designated timeframe.

Advertisement

UK Crypto Tax Compliance Terms Defined

The HMRC’s latest guidance outlines the consequences for those who fail to comply. According to the HMRC, the duration within which unpaid taxes must be settled depends on the reason for the initial non-payment. Cryptocurrency users who have unintentionally overlooked their tax obligations will be liable for the past four years. The period extends to six years for those who have demonstrated a lack of care in their tax dealings. However, deliberate tax evaders face the most severe scrutiny, with HMRC demanding tax payments for up to 20 years.

This directive also emphasizes the importance of including exchange tokens like Bitcoin, non-fungible tokens (NFTs), and utility tokens in the disclosure. As digital assets are treated similarly to other financial instruments, they fall under the Capital Gains Tax (CGT) bracket. The CGT rates vary from 10% to 20%, influenced by an individual’s income and the size of their gains.

Advertisement

Crypto Tax Errors Lead to Penalties

The HMRC has clearly stated that failure to declare and pay taxes on crypto holdings will lead to additional interest and penalties. The interest, which accrues daily from the due date until full payment, adds an extra layer of urgency to this issue. It is important to note that any tax on previous-year crypto holdings now considered late will automatically incur this interest. Disclosures that do not accurately include this interest will be rejected.

Upon completing the disclosure process, taxpayers will receive payment reference numbers and have 30 days to settle their dues. The HMRC’s recent publication serves as a crucial reminder for UK crypto hodlers to be vigilant and compliant with tax regulations to avoid punitive measures.

Read Also: 79% Cryptocurrency Holders In UK Are Men, Reports FCA

 

Advertisement

Share
Maxwell Mutuma

Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. I write extensively on topics such as blockchain, cryptocurrency, tokens, and more for many publications. My goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.

Published by
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Recent Posts

  • News

Will Bitcoin Rally as JPMorgan Tips Fed To End QT at FOMC Meeting?

Bitcoin traders are turning their attention to this week’s Federal Open Market Committee (FOMC) meeting.…

October 26, 2025
  • News

White House Crypto Czar Backs Michael Selig as ‘Excellent Choice’ To Lead CFTC

White House crypto czar David Sacks has shown his support for Donald Trump's nomination of…

October 25, 2025
  • News

Ripple Explores New XRP Use Cases as Brad Garlinghouse Reaffirms Token’s ‘Central’ Role

Crypto firm Ripple has revealed that it is exploring new ways to use XRP within…

October 25, 2025
  • News

Kyrgyzstan Adds Binance Coin (BNB) to National Crypto Reserve, CZ Confirms

Kyrgyzstan has made a significant move in the adoption of digital finance. It has now…

October 25, 2025
  • News

Ripple-Backed Evernorth Grows XRP Treasury to $1B Ahead of Nasdaq Listing

Ripple-backed Evernorth's XRP treasury has grown to $1 billion just days after the company announced…

October 25, 2025
  • News

Trump Tariff Tensions Ease as U.S. and China Hold Positive Trade Talks Ahead of Oct 30 Summit

In fresh developments, the United States and China’s trade teams have commenced negotiations on the…

October 25, 2025