By Iqbal Gandham, UK Managing Director of trading platform eToro
As media outlet Cointelegraph pointed out recently, industry sources said that the agency has sent letters to at least three crypto exchanges in the U.K., including Coinbase, eToro and CEX.io, requesting that they provide lists of users and transaction data.
According to the cited sources, HMRC is reportedly aiming to cooperate with crypto exchanges in a bid to identify individuals who evade taxes. However, the agency will probably only go back two or three years.
While this may ultimately mean a ‘surprise’ tax bill for some people, it is proof that crypto currencies are now being treated seriously by HMRC, just as it would any other asset class, cementing its legitimacy.
In fact, I’d like to thank the tax man, because this really represents a coming of age for the UK crypto currency sector and is a stepping stone to regulation which we fully welcome, as it will support even greater adoption.
We have seen from our own clients that an interest in crypto can act as a gateway for them to not only invest in the asset class for the first time, but also to then explore other investment opportunities, such as stocks. Cultivating and nurturing this wider interest in investing can only be a good thing in a low interest rate environment where people are getting such paltry returns from their ordinary savings.
Of course no one likes paying tax, but in terms of the size of the bill facing investors, we estimate that the impact of this retrospective tax will be relatively low for most crypto investors. eToro has created a calculator to help them work out if they have to pay any tax and, if so, how much that is likely to be.