Cryptocurrency holders in the United Kingdom will need to make sure that they give their details to any crypto business so they can pay the right amount of tax.
His Majesty’s Revenue and Customs (HMRC) could fine people who don’t do it up to £300.
The move, which will kick in in January next year, is part of the British government’s Cryptoasset Reporting Framework.
And whether you are working with crypto exchanges, some of the UK’s best bitcoin casinos, or buying directly, you will need to hand over your information.
The data that the HMRC needs you to give to your crypto provider includes your name, address, date of birth, where you reside for tax purposes, a national insurance number or tax reference, and a round-up of your crypto transactions.
HMRC says that the change in regulations could help generate as much as £315 million in tax revenue by the start of the next decade, enough money to pay for more than 10,000 newly-qualified nurses.
The UK’s Exchequer Secretary to the Treasury, James Murray, said: “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.”
Jonathan Athow, HMRC’s Director General for Customer Strategy and Tax Design, said that British tax rules already meant people had to pay tax when they sold, swapped or transferred crypto, so the new regulations were not the same as a new tax.
People who either get paid in crypto or make money through staking, lending or mining already have to pay income tax and National Insurance on it.
Meanwhile, selling or exchanging crypto is already subject to capital gains tax.
Mr Athow said: “These new reporting requirements will give us the information to help people get their tax affairs right.
“I urge all cryptoasset users to check the details you will need to give your provider. Taking action now and having this information to hand will help you avoid penalties in the future.”
The Cryptoasset reporting framework will help align the UK with the international standard set up by the Organisation for Economic Co-operation and Development (OECD).
This, in turn, will let tax authorities in the 38 member countries share information.
The introduction of the Cryptoasset Reporting Framework could well hurt British crypto casinos and their customers.
With many crypto betting sites having a lack of Know Your Customer (KYC) checks as a selling point, the new rules could see them move outside the UK or risk penalties.
The companies that remain will have to report transaction data to the authorities and will also likely have to invest in programs that can track information and make secure reports, thus eating into their profits.
They would, in many cases, have to apply for a UK gambling license.
It is entirely possible that some casinos could stop serving British customers altogether.
Meanwhile, it is likely that crypto casino customers from the UK will not be able to remain anonymous and could, instead, move to gambling-related decentralised applications (DApps) to keep on playing.
There is the possibility that they could use offshore crypto casinos, but this is something of a legally gray area.
