The UK government is intensifying efforts to close the tax gap by targeting cryptocurrency investors who evade taxes. Under the new Cryptoasset Reporting Framework, set to take effect in January, crypto holders must provide personal details to the platforms they use, ensuring proper tax reporting to HMRC.
Investors in digital currencies such as Bitcoin, Ethereum, and Dogecoin will face a £300 fine if they fail to disclose accurate information to crypto service providers. These platforms will also be fined if they do not submit correct transaction details or tax reference numbers.
The government estimates the new crypto reporting rules will raise up to £315 million in revenue by April 2030.
James Murray MP, Exchequer Secretary to the Treasury, stated, “We’re going further and faster to crack down on tax dodgers as we close the tax gap. By ensuring everyone pays their fair share, the new crypto reporting rules will make sure tax dodgers have nowhere to hide, helping raise the revenue needed to fund our nurses, police, and other vital public services.”
Potential for Wider Tax Reforms Amid Political Tensions
The crypto tax crackdown comes amid broader debates on taxation and public finances. Chancellor Rachel Reeves recently faced scrutiny after the government reversed its welfare reform plans, a move that unsettled financial markets.
During an interview, Reeves defended her approach, saying, “I’m not going to apologise for making sure the numbers add up. We did that well in the Budget and Spending Review by increasing taxes on the wealthiest and on businesses.”
However, she refused to rule out further tax increases, stating, “It would be irresponsible for a Chancellor to do that. We took tough decisions last year to correct previous economic mismanagement, and we won’t repeat those mistakes. But there are costs to what happened.”
Reeves also acknowledged the political fallout from the welfare U-turn, calling it “damaging” but necessary under the circumstances.
