HM Revenue and Customs has no plans to allow UK residents to pay taxes in digital currencies

Maria Nikolova

Conservative MP Lord Bates sheds light on HMRC tax policy relating to cryptocurrencies.

HM Revenue and Customs has no plans to permit to UK taxpayers to pay their taxes in digital currencies. This was stated by Conservative MP Lord Bates in a written answer to a question posed by Lord Harris of Haringey.

Lord Harris of Haringey has asked whether the government has plans to allow UK taxpayers to pay their taxes in digital currency.

HM Revenue and Customs does not offer digital currencies as a payment method and has no current plans to do so, said Lord Bates.

Lord Bates also provided some information regarding taxation for the digital currency sector and any potential reforms in this aspect. He explained that “gains made on digital currency are currently chargeable at the normal Capital Gains Tax rates, depending on the facts of the case”. The government keeps all tax policy under review, he added.

The information was given shortly after Lord Bates clarified the stance of the UK Government on the possible regulation of digital currency businesses. On November 21, 2017, he said that the Government is currently negotiating amendments to the 4th Anti-Money Laundering Directive set to bring virtual currency exchange platforms and custodian wallet providers into the scope of Anti-Money Laundering and Counter-Terrorist Financing regulation.

This will require such firms to conduct due diligence upon their customers, with their activities being overseen by national competent authorities for these areas, he added. The government supports the intention behind these amendments.

Lord Bates noted that the stance of individual firms towards providers of digital currencies is a commercial decision for those firms, and it would not be appropriate for the Government to intervene.

In September this year, the Financial Conduct Authority issued a consumer warning about the risks of Initial Coin Offerings (ICOs). And about two weeks ago, the regulator issued a special warning about the risks associated with cryptocurrency CFDs.

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