Crypto tax experts voice concern about UK’s digital laws

October 08, 2018
Chris Wheal

The UK is failing to adapt to the pace of digital change and is unprepared for the “seismic changes to business and society that are around the corner,” according to leading digital and cryptocurrency tax experts.

Bitcoin in chains

The UK was one of the first European countries to issue tax guidance on BitcoinThe warning came following Chancellor Phil Hammond’s Conservative Party conference speech hinting of treasury plans for a “digital services tax” adding to the continued confusion over cryptocurrency tax laws.

The regulation would aim to recover more taxes from international tech giants like Amazon, which is next week due to announce how much UK tax they paid in 2017.

Perry Woodin, Co-Founder of cryptocurrency tax platform Node40 Balance, said that although society and the economy are increasingly dependant on digital innovation, laws are becoming hopelessly out of date.

He said: “Many people in my industry have worries about the general levels of digital expertise among policymakers. The digital services tax Philip Hammond hinted at needs to be carefully designed so it doesn’t hit smaller British companies that want to grow globally. Making any distinction between tech and non tech companies is also dangerous. All businesses are increasingly digital nowadays.

“From the absence of regulations relating to Big Tech, to the vagaries of the laws relating to cryptocurrency investment, we’re finding individuals and small businesses are confused and frustrated. We have clients in the UK who want to comply with UK tax laws relating to cryptocurrency but just don’t know how to given the UK’s vague stance.”

The UK was one of the first European countries to issue tax guidance on Bitcoin and other digital currencies in 2014. But since then, it has lagged behind European neighbours. The government is currently awaiting an assessment from a cryptocurrency task force – made up of senior officials and financial regulators – which is tasked with advising on regulatory policy for cryptocurrencies.

Sean Ryan, Co-Founder of NODE40, said: “There are so many unanswered questions around cryptocurrencies. The tax treatment of ICOs (Initial Coin Offerings) is one example. The treatment of tax around them is almost treated on a case-by-case basis. That’s not good enough.”

 

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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