UK Budget Avoids Tax Hikes for Bitcoin Gains
U.K.’s finance minister Rishi Sunak has announced a generous budget to steer the economy through the COVID-19 crisis. The capital gains tax rates were unchanged, easing fears of a tax hike among crypto investors.
UK Budget Delays Tax Hike
Rishi Sunak said that he would do “whatever it takes” to support the economy in the crisis and begin fixing public finance in terms of debt.
The budget deficit, the difference between the government’s earnings and borrowings, for the last year soared above $377 billion (£270 billion). These figures are the highest since world war II. The government’s debt from the central bank has seen an unprecedented increase in money printing.
After inflation woes, Bitcoin and crypto investors’ concerns revolved around a potential hike in the capital gain tax (CGT) rate. However, the British finance minister has kept the CGT rates—10% for taxable income below $69,874.00 (£50,000) and 20% for higher amounts—and other income tax and VAT rates as it is.
The corporate tax will be increased from 19% to 25% in 2023.
Sunak announced a freeze in the income tax threshold to current levels for 2021, keeping the personal allowance to $17468.50 (£12,500) this year, and announced an increase of $27,95 (£20) to $17,570 (£12,570) for the next five years.
British citizens looking forward to extending the $24.1 per week Universal Credit for another six months were not disappointed. The government will continue to fund the furlough scheme to support employees and public grants till September.
The finance minister predicts in the UK budget announcement that the nation’s economy would return to pre-crisis levels by mid-2022.
Disclosure: The author held Bitcoin at the time of press.
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Author: Nivesh Rustgi