Matt Hancock, former Secretary of State for Digital, Culture, Music and Sport, said the UK needs to take a long-term approach and lower crypto taxes to allow digital innovation to grow.
“HMRC took a revenue-maximizing approach… and applied it in a sledgehammer way… what we need to do is take a growth-maximizing view where future revenue will be far greater.”
Hancock said during his keynote speech at Zebu Live in London on September 22.
HMRC, the UK tax authority, was the focus of Hancock’s Q&A portion of his speech. UK tax laws treat crypto the same as any other asset, meaning all crypto trades are subject to a 20% capital gains tax.
Any time one digital asset is exchanged for another is a taxable event. In addition, activities such as mining and yield farming count as income and are taxed at 40% if someone earns more than £50,271. However, people earning less than £12,570 a year pay 0% income tax.
Capital gains tax in the UK is complicated to understand and involves calculating your income tax to determine if you are within the property tax band. Those within the “land tax rate” pay 10% capital gains tax, others 20%.
Hancock is optimistic about crypto and digital assets as a method for the UK to regain dominance in global financial markets and now believes the UK tax rate on crypto does not best serve innovation in the country.
The MP also argued that some laws should be rewritten to accommodate innovation in the crypto industry. Hancock further claimed that:
“Within the existing framework, we need regulators that are positive, open-minded and willing to take risks, rather than being the opposite of all of those things.
During the keynote, Hancock repeatedly asked the UK public for feedback on the issues they face when working with crypto in the UK. Any UK citizen wishing to contact Hancock can do so using the contact details listed on Parliament’s website.
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