Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment he has made of the adequacy of the level of taxation on (a) purchasing, (b) selling and (c) trading of cryptocurrencies in the UK.

The Government established a Cryptoassets Taskforce in 2018, consisting of HM Treasury, the Bank of England and the Financial Conduct Authority (FCA). The Cryptoasset Taskforce is responsible for assessing developments in the cryptoasset market, and deciding what, if any, regulation is required in response.

HM Treasury and UK authorities have taken a series of actions to support innovation while mitigating risks to stability and market integrity. These include launching a new anti-money laundering and counter-terrorist financing regime for cryptoassets in 2020; and consulting on a proposal to ensure cryptoassets known as ‘stablecoins’ meet the same high standards expected of other payment methods. The Government will issue its response to this consultation shortly. On 18 January 2022, the Government announced its intention to legislate later this year to bring certain cryptoassets into the scope of financial promotions regulation, requiring them to be fair, clear and not misleading. This is aimed at improving consumers’ understanding of the risks and benefits associated with cryptoasset purchases, and ensuring that cryptoasset promotions are held to the same high standards as broader financial services products.

Profits from trading in and gains from disposing of cryptoassets are taxed in the same way and at the same rate as those from other assets. HMRC’s Cryptoassets Manual, one the most detailed publications from any tax administration, explains the tax consequences of different types of transactions involving cryptoassets for both businesses accepting them and individuals using them.