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<p><strong>The UK’s tax authority, HM Revenue and Customs (HMRC) <a href="https://uk.finance.yahoo.com/news/hmrc-hold-bitcoin-under-plans-140610832.html" target="_blank" rel="noopener">wants to ensure</a> that tax evaders cannot hide their money in crypto wallets. </strong></p>
<h2 style="text-align: center;" id="seizing-crypto-from-tax-dodgers">Seizing Crypto from Tax Dodgers</h2>
<p>HMRC is considering new rules that would allow it to seize cryptocurrency from businesses that fail to pay their taxes. The government is exploring proposals that would give the tax agency powers to access online wallets in order to modernize how tax is collected in the digital age.</p>
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">
<p lang="en" dir="ltr">HMRC TO HOLD BITCOIN UNDER PLANS TO SEIZE CRYPTO FROM TAX DODGERS &#8211; TELEGRAPH. <a href="https://t.co/SPRA7wSR2u">https://t.co/SPRA7wSR2u</a></p>
<p>&mdash; Breaking Market News (@financialjuice) <a href="https://twitter.com/financialjuice/status/1655283294588620800?ref_src=twsrc%5Etfw">May 7, 2023</a></p></blockquote>
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p>
<h2 style="text-align: center;" id="potential-seizure-of-cryptocurrency-wallets">Potential Seizure of Cryptocurrency Wallets</h2>
<p>Currently, HMRC has the ability to seize funds from bank accounts when individuals fail to pay taxes. The tax authority is considering extending these powers to online payment accounts, such as PayPal, and potentially to cryptocurrency wallets if virtual currencies become a more common way of making payments online.</p>
<h2 style="text-align: center;" id="crackdown-on-cryptocurrency-sector">Crackdown on Cryptocurrency Sector</h2>
<p>Seizing cryptocurrencies from wallets would be the latest crackdown on the sector, which has been accused of facilitating money laundering and <a href="https://walletinvestor.com/magazine/uk-government-to-ban-cold-calls-selling-financial-products-including-crypto" target="_blank" rel="noopener">criminal activity</a>. Cryptocurrencies such as Bitcoin have been seen as a way to give owners control of their finances outside of government control. Law enforcement agencies are currently able to seize cryptocurrencies from centralised online exchanges when they detect criminal activity.</p>
<h2 style="text-align: center;" id="unclear-regulations">Unclear Regulations</h2>
<p>HMRC acknowledges that it is unclear how easy it would be to seize cryptocurrency wallets due to the fluctuating value of virtual currencies. Nevertheless, the government has stated that it expects to give HMRC powers to seize funds from digital wallets, although it is unclear if this will extend to cryptocurrencies.</p>
<h2 style="text-align: center;" id="balancing-powers-with-safeguards">Balancing Powers with Safeguards</h2>
<p>All of HMRC’s powers are balanced by safeguards, which should reassure taxpayers that powers are exercised proportionately and consistently. Police have seized hundreds of millions of pounds in cryptocurrency linked to criminal operations, often auctioning it off. HMRC recently announced that cryptocurrencies would be added to self-assessment tax returns, which will lead to an estimated extra £10m per year in capital gains taxes on profits that are currently not reported.</p>
<h2 style="text-align: center;" id="ensuring-hmrc-s-debt-collection-keeps-pace">Ensuring HMRC’s Debt Collection Keeps Pace</h2>
<p>HMRC stated that the proposals will help ensure its debt collection keeps pace with modern business practices. With e-commerce, new business practices have emerged with fewer physical and owned assets held in the UK, making it harder for HMRC to collect unpaid taxes using existing powers.</p>
<p><img decoding="async" loading="lazy" class="aligncenter size-full wp-image-22909" src="https://walletinvestor.com/magazinadmin/wp-content/uploads/2023/05/cryptocurrencies-with-tax-word-dark-wood-background.png" alt="" width="800" height="533" srcset="https://walletinvestor.com/magazinadmin/wp-content/uploads/2023/05/cryptocurrencies-with-tax-word-dark-wood-background.png 800w, https://walletinvestor.com/magazinadmin/wp-content/uploads/2023/05/cryptocurrencies-with-tax-word-dark-wood-background-300x200.png 300w, https://walletinvestor.com/magazinadmin/wp-content/uploads/2023/05/cryptocurrencies-with-tax-word-dark-wood-background-768x512.png 768w" sizes="(max-width: 800px) 100vw, 800px" /></p>
<h2 style="text-align: center;" id="conclusion">Conclusion</h2>
<p>HMRC is exploring new rules that would enable it to seize cryptocurrency from businesses that fail to pay their taxes. The government has expressed its intention to give HMRC powers to seize funds from digital wallets, although it is unclear if this will extend to cryptocurrencies. HMRC stated that the proposals will help ensure its debt collection keeps pace with modern business practices, but all of its powers are balanced by safeguards, which should reassure taxpayers that powers are exercised proportionately and consistently.</p>

HMRC Plans to Seize Crypto from Tax Dodgers

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