UK Government Eyes Crypto Wallets of Tax Evaders

The UK government is reportedly exploring the possibility of giving the HM Revenue & Customs Department (HMRC) the authority to access digital assets from online wallets of companies that owe tax.

The proposal comes as part of new regulations that aim to normalize digital asset payments.

UK Taxpayers Could Pay $12 Million More in Crypto Taxes The government is reviewing the Direct Recovery of Debts (DRD) legislation, which currently allows the HMRC to take money from the bank accounts of tax evaders. The proposed revision would extend the HMRC’s power to online wallets and PayPal accounts.

Crypto exchanges can’t stop users from depositing funds, but they can block them from withdrawing or transferring them.

Stakeholders believe that the HMRC’s responsible use of the existing DRD suggests it will not abuse its access to digital wallets.

The government will consult with “wallet operators” to develop the proposal and understand the challenges of implementation.

The HMRC collected 787 billion GBP ($994 billion) in the last tax season. The tax authority said that cryptocurrencies would be added to individual returns, increasing the capital gains collection by about $12 million.

The London Metropolitan Police and other law enforcement agencies can already seize crypto linked to criminal activity. Last year, they busted a drug trafficking ring by tracing crypto transactions between the exporter and importer. In 2021, they seized almost $400 million in illegal crypto. The US Internal Revenue Service (IRS) recently deployed agents to help international law enforcement crack down on tax and other financial crimes involving cryptocurrencies. They will act as international proxies advising case agents on the feasibility of obtaining certain evidence. The agents will also advise on local legal and cultural considerations.

The IRS analyzes crypto tax disclosures and investigates white-collar crime through tools developed by

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