CryptoUK joins industry coalition calling for DeFi tax reform
CryptoUK has joined a coalition of UK cryptoasset industry and professional bodies in writing to HM Treasury, urging the Government to prioritise reform of the tax treatment of decentralised finance lending and staking.
The joint letter calls for the UK tax regime to better reflect the economic substance of DeFi lending and staking arrangements, reducing unnecessary complexity, uncertainty and disproportionate compliance burdens for individuals and businesses participating in the sector.
The current tax treatment can create outcomes that do not align with the commercial reality of these arrangements. As the UK continues to develop its wider cryptoasset framework, the coalition argues that tax policy must evolve alongside regulation to ensure the UK remains competitive, coherent and supportive of responsible innovation.
The letter follows several years of consultation and engagement between industry, HMRC and HM Treasury, including a Call for Evidence and formal consultation on the taxation of DeFi lending and staking. While broad consensus has emerged that reform is needed, there has not yet been a legislative resolution.
The coalition’s position is not a request for preferential treatment, but for neutrality, certainty and coherence across the UK’s financial services framework. Where the economic substance of DeFi lending and staking arrangements is equivalent to traditional securities lending, the tax treatment should be similarly neutral.
The issue is becoming increasingly important as the UK progresses its wider cryptoasset regulatory framework, including the FCA’s developing regime and the implementation of the OECD’s Cryptoasset Reporting Framework. Without reform, continued uncertainty could create avoidable burdens for compliant taxpayers and undermine the UK’s ambition to be a leading global centre for cryptoasset innovation.
Suzanne Morsfield, Co-Lead of CryptoUK’s Tax Working Group, said:
“If implemented promptly, the UK could move ahead of many of its international peers, establishing itself as a global leader by being among the first countries to modernise its tax legislation to address these important issues.”
The letter urges the Government to move from consultation to implementation and prioritise the swift introduction of the necessary legislation for inclusion in the next Finance Bill.
Coalition signatories
The joint letter was submitted by representatives from across the UK cryptoasset and professional services sector, including:
- Cessiah Lopez, Superteam UK
- Dion Seymour, Andersen LLP
- Fabienne van Kleef, Global Digital Finance
- Laura Navaratnam, Crypto Council for Innovation
- Richard Jones and Polly Tsang, Institute of Chartered Accountants in England and Wales
- Suzanne Morsfield, CryptoUK
- Simon Jennings, UK Cryptoasset Business Council
CryptoUK was pleased to support this shared industry position and contribute through Suzanne Morsfield, Co-Lead of CryptoUK’s Tax Working Group.
Download the full letter
