The UK’s Tax Authority is gearing up to implement new regulations that aim to empower the agency to access custodial digital wallets and confiscate cryptocurrencies from businesses that have not fulfilled their tax obligations. This move comes as part of the country’s broader plan to modernize the way in which the government collects taxes, aiming to grant HM Revenue & Customs (HMRC) the same ability to recover debts from digital wallets as it currently does for bank accounts.

The proposal has sparked a public consultation in which companies operating in the digital currency space have raised their concerns over how to practically implement such a policy, as well as the difficulty created by the fluctuating value of cryptoassets.

At the same time, the UK government is advancing the Financial Services and Markets Bill (FSMB) which will shape the forthcoming regulation in the crypto space, creating heightened compliance obligations for these businesses.

In an effort to ensure the appropriateness of this proposal and address the raised issues, a second assessment stage is set to be initiated in which stakeholders, such as digital wallet operators, will be consulted.

This development comes after financial secretary to the UK Treasury, Andrew Griffith, announced that crypto regulations in the country are set to solidify within the next 12 months. Overall, this move indicates the UK is aiming to pursue a more centralized approach to the way in which cryptocurrencies are managed, allowing the government to recover funds that are owed to the national exchequer.



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