U.K Govt Ready to Tax DeFi, Calls for Evidence
Amid the recent crisis in the DeFi market, the crypto holders in the UK are going to be taxed by the government. The government has decided to tax and regulate staking as well as the lending of crypto assets and has asked relevant entities to provide their opinion in this regard.
HMRC Calls for Evidence on DeFi
Her Majesty’s Revenue and Customs (HMRC) has issued a call today for evidence to find if the expense and burden of administrative operations can be lowered for taxpayers. The government also wants to ascertain if the tax procedure can be ameliorated.
In this regard, the government is going for an open consultation to gather a wide response from organizations and traders involved in DeFi-based operations. A reference has been made to the already announced measures in April to ensure that the financial services space of the country remains updated. The purpose of this measure is to increase jobs, enhance investment, and provide more options to the citizen. These measures will help to address the concerns raised by stakeholders related to the staking and lending of crypto-related assets.
The duration of this call for evidence is 8 weeks starting from today. Initially, an email address has been provided for opinions and evidence but it has been said that the possibility of conferences is also bright to further discuss the arguments. After the respective call for evidence, a summary of the reactions will be uncovered by the relevant authorities regarding the decision.
Proposed Questions for Consultation
To get the best outcome of this evidence-gathering venture, HMRC has proposed 11 questions as well. The questions asked are mostly related to the previous experience of respondents with DeFi and their knowledge about the existing implementation of rules. A question asks to suggest the proportion of tax that should be imposed on staking and lending. Another question inquires whether the existing rules should be modified or not.
The respondents are also granted the liberty to suggest any alternative for the proposed tax implementation to meet the same results. Lastly, the government has sought suggestions to ensure no discrimination is being done against DeFi consumers.
