UK should lower crypto tax rate to encourage growth – MP Matt Hancock

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Matt Han­cock, for­mer Sec­re­tary of State for Dig­i­tal, cul­ture, music, and sport, said the U.K. must take a long-term approach and low­er cryp­to tax­es to allow dig­i­tal inno­va­tion to grow.

“HMRC has tak­en a rev­enue-max­i­miz­ing approach…applying it in a sledge­ham­mer way… what we need to do is take a growth-max­i­miz­ing view where rev­enues in the future will be far greater.”

Han­cock said dur­ing his keynote at Zebu Live in Lon­don on Sept. 22.

HMRC, the U.K. tax author­i­ty, was the sub­ject of focus for Han­cock dur­ing the Q&A sec­tion of his address. The U.K. tax laws treat cryp­to the same as oth­er assets mean­ing that a 20% cap­i­tal gain tax applies to all cryp­to trades.

Any time a dig­i­tal asset is trad­ed for anoth­er, it is a tax­able event. Fur­ther, activ­i­ties such as min­ing and yield farm­ing are con­sid­ered income and taxed at 40% for any­one earn­ing over £50,271. How­ev­er, peo­ple earn­ing less than £12,570 annu­al­ly pay 0% income tax.

Cap­i­tal gains tax in the U.K. is com­pli­cat­ed to under­stand and involves cal­cu­lat­ing your income tax to estab­lish if you are with­in the basic tax rate band­ing. Those with­in the ‘basic tax rate’ pay 10% cap­i­tal gains tax, with oth­ers pay­ing 20%.

Han­cock, bull­ish on cryp­to and dig­i­tal assets as a method for the U.K. to regain dom­i­nance in the glob­al finan­cial mar­kets, now believes the U.K. tax rate for cryp­to does not best serve inno­va­tion with­in the country.

The MP also argued that some laws should be rewrit­ten to accom­mo­date inno­va­tions with­in the cryp­to indus­try. Fur­ther, Han­cock assert­ed that:

“With­in the exist­ing frame­work, we need reg­u­la­tors to be front foot, pos­i­tive, open, risk-on, instead of the oppo­site of all those things.

Dur­ing the keynote, Han­cock repeat­ed­ly asked for feed­back from the British pub­lic on the issues they face work­ing in cryp­to in the U.K. Any U.K. cit­i­zens wish­ing to con­tact Han­cock can do so via the details list­ed on the Par­lia­ment web­site.

 

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