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British MP Matt Hancock declares UK should lower tax rate on crypto to encourage growth

British MP Matt Hancock declares UK should lower tax rate on crypto to encourage growth

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Matt Hancock, former minister for digital, culture, music and sport, said during a keynote speech at Zebu Live in London on September 22 that the UK needs to lower crypto taxes to enable digital innovation.

“HMRC has taken a revenue maximization approach … applying it with a hammer … we need to take a growth maximization view where revenue will be much higher in the future.”

HMRC, the UK tax authority, was Hancock’s focus during the Q&A section of his speech. UK tax law treats crypto in the same way as other assets, meaning that 20% capital gains tax applies to all crypto transactions.

Whenever a digital asset is exchanged for another, it is a Taxable transaction. In addition, activities such as mining and cash cropping are considered income and are taxed at 40% for anyone earning over £50,271. However, people earning less than £12,570 a year pay 0% income tax.

Capital gains tax in the UK is complex to understand and involves calculating your income tax to see if you are in the basic rate. Those covered by the “basic tax rate” pay 10% capital gains tax, while others pay 20%.

Hancock, who is bullish on crypto and digital assets as a way for the UK to regain dominance in global financial markets, now believes that the UK tax rate on crypto payments is not best serving innovation in the country.

The MP also argued that some laws should be rewritten to accommodate innovations in the crypto industry. Moreover, Hancock claimed that

“In the current framework, we need regulators to be at the forefront, positive, open, risk-averse, rather than the opposite.

During the keynote, Hancock repeatedly asked for feedback from Brits about the issues they are facing in the crypto industry in the UK. Any UK citizen wishing to contact Hancock can do so via the details on Parliament’s website.

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