The explosive crypto space has garnered worldwide attention in the past year. The cryptocurrency exchanges have also seen massive growth due to a surge in trading volume in 2021.
At the time of going to press, UK regulators have developed a new tax structure for crypto exchanges. follow report Cryptocurrency platforms have been hit by a massive “digital tax” as cryptocurrencies are not currencies or commodities.
“You do not qualify for the exemption granted to the financial markets … UK Customs and Taxation (HMRC) does not recognize cryptocurrencies as financial instruments.”
This is also highlighted by the tweet below.
#Bitcoin Exchanges were included in the Treasury Department’s technology tax after HMRC said they would not qualify for a tax exemption for financial services companies.@jamestitcomb Reports https://t.co/ywPBYFim2t pic.twitter.com/dK7GXzTbUl
– Telegraph business (@telebusiness) November 28, 2021
“Bitcoin exchanges are on the Treasury Department’s technology tax list after HMRC said they were not getting an exemption for financial services companies.”
However, it falls under the digital services tax that was introduced last April. The statement also states:
“As of April 1, 2020, the government will impose a new 2% tax on revenues from search engines such as Google and Yahoo, social media providers and online marketplaces that benefit from UK users.”
HMRC has also updated the tax guidelines for digital providers:
“There are many crypto assets, each with different properties. Since cryptocurrencies are not money, goods or financial contracts, it is unlikely that the exchange of crypto assets would be subject to the same exception as the online financial markets. ”
The move comes after a G20 tax deal earlier this year that aims to punish tax evasion.
Coinbase, reputedly one of the largest exchanges in the world, will be affected, as will other major London exchanges. There are reports that Coinbase UK is expected to exceed the £ 25 million (USD 33 million) revenue threshold slightly, which would mean higher fees for crypto buyers and sellers.
Needless to say, many people expressed their concern shortly after the news was announced.
Cryptocurrencies in the UK have been the center of attraction for some time. The British Financial Conduct Authority (FCA) has also tightened the regulation so far. They spent around $ 671,000 to hire advisors to a blockchain analytics firm to fight crypto-related crimes.
However, this is not new. Other countries like South Korea have also introduced similar tax regulations. Some even predict that other regions will soon follow suit.
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According to AMBCrypto