HMRC (Revenue Tax and Customs under Ma), the UK’s leading tax authority, is expected to impose new rules on crypto by January 2026. If token holders are not used to the changes, they may face sudden penalties.
Lee Murphy, managing director of Accountancy Partnership, has provided Beincrypto with an exclusive commentary on how to navigate these new guidelines.
New UK Crypto Tax explained
The crypto market is on a very good pace, so many users across the UK are wondering about the tax impact.
In the past, regulators have, after all, considered some aggressive measures to sniff out private benefits. HMRC will impose new rules by the next tax season, so users will need to recognize their meaning.
“If you use your cryptography to sell, exchange, talent, or purchase cryptography online, you may be subject to taxes. In some cases, HMRC treats cryptography as a capital asset.
Essentially, if you are a UK resident who has a Crypto for a long time, you don’t have to pay taxes just for improving the price of your assets.
They only kick in when the token actually changes hands. However, to be clear, it involves directly exchanging one token for another, even if Fiat is not involved.
These will cause tax penalties, so users must keep diligent records.
Possible loopholes to minimize penalties
Fortunately, if your profit is less than £3,000, you will be exempt from capital gains tax. However, previous guidelines were more generous.
More importantly, HMRC struggles to track user data by collaborating with major exchanges to analyze blockchain data. Murphy warned that private profits may be difficult to hide properly.
So, is there a way to reduce the UK’s crypto tax liability? Murphy pointed out that getting paid with crypto is defined by loose rules.
With an interesting twist, staking rewards also fall into this category.
“If you’re getting code as part of your job, you’re going to be looking at income taxes rather than (capital gains).
To be clear, this solution is not a diamond bullet. If your income is less than £12,570, the crypto holder will not have to pay taxes in the UK.
However, it includes not just crypto-related items, but all your income. Token-based pay earns at least a lower fee, but there is no innocent cheat system yet.
The UK may be working on a friendly crypto policy, but taxes are not part of it. After all, the financial system was already displaying specific Animus towards Web3.
UK property owners need to prepare for more sudden penalties and more comprehensive accounting from HMRC.
It first appeared that thousands of British residents at risk of fines and prisons due to changes in the crypto tax.
