For the moment, this initiative is limited to a proposal of a British government very straddling the fight against tax evasion. But in case of materialization, the HMRC will be assigned a power that will harm the rebellious.
Strengthening the power of HMRC
Certainly the United Kingdom is very fond of metaverse and Web3, to the point of attributing an envelope of 370 million pounds sterling to its Department of Science, Innovation and Technology freshly born. But the government of Rishi Sunak does not mess with the authors of illegal crypto advertisements. A prison sentence is reserved for them in the event of non-compliance with the rules.
In a publication dated May 7The Telegraph reported that the British government has new proposals to regulate the UK finance sector. They concern theextension of the power of HM Revenue & Customs (HMRC), the kingdom’s tax administration.
As a reminder, this agency already has the authority to seize funds from individuals’ bank accounts who do not pay taxes. This comes under a law called ” direct debt collection “.
In the consultative document detailing this initiative, we can read this:
” Given that HMRC has had the power to collect debts established directly from debtors’ bank accounts and building society for 7 years, it makes perfect sense for HMRC to modernize its approach so that the same power exists in relation to relates to digital wallets. »
What about the implementation of the project?
Already, it should be noted that the UK has gotten ahead of the game when it comes to cryptocurrency regulation. Andrew Griffith, Financial Secretary to the British Treasury, had he not recently declared thata clear legal framework will emerge in the next 12 months ?
Also, we note the existence ofa so-called Financial Services and Market Bill (FSMB) which will regulate stablecoins and cryptocurrencies in the kingdom. Crypto companies will have an interest in working on their compliance as soon as it is promulgated.
Otherwise, if this government proposal is validated, the crypto wallet for companies and individuals carrying out recurring online transactions may be subject to seizure.
But it is clear that this involves several obstacles. On the one hand, there is the volatility of cryptocurrencies. And on the other, the easy entry of wallets backed by centralized exchanges (CEX) such as Coinbase, Binance or Kraken. It remains to be seen whether the British government will be able to confiscate crypto assets held in non-custodial wallets.
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