Market leading insight for tax experts
View online issue

Cryptoassets and tax: public awareness is key to compliance

printer Mail

Responding to HMRC’s consultation, Cryptoasset Reporting Framework and Common Reporting Standard, on the UK’s implementation of the OECD Cryptoasset Reporting Framework and amended Common Reporting Standard (to include the exchange of information on cryptoasset transactions), the CIOT suggests that the proposals should help improve compliance.

  • bringing the Cryptoasset Reporting Framework (CARF) and amendments to the Common Reporting Standard (CRS) into UK law should help improve compliance, via the provision of data to HMRC;
  • reporting should however be proportionate to the aims of improving compliance, and avoid becoming a burden on business which could potentially have the opposite effect;
  • guidance (with examples) on the nexus criteria (to determine the dominant jurisdiction) and also on key definitions (e.g. ‘reportable user’, ‘reportable information’ and ‘relevant transaction’) would help improve understanding of key concepts; and
  • penalties for failures by Reporting Cryptoasset Service Providers (RCASPs) to inform individual reportable users of the information that has been reported to HMRC are welcome but seem inconsistent with the wider policy of not requiring RCASPs to provide that information to reportable users in the first place. Such an obligation would aid transparency and provide certainty for individuals.

Greater compliance will, however, only come with greater public awareness. One key concern remains around public understanding of the tax compliance obligations relating to cryptoassets: ‘There is no tailored legislation and only (sometimes scant) guidance available for agents (especially on VAT matters), but for lay taxpayers there would appear to be very little understanding that cryptoassets are even taxable’.

Issue: 1667
Categories: News