If you own any crypto assets, it is important that you consider whether any gains realised have been reported correctly as these are now being targeted by the UK tax authorities at HM Revenue & Customs (‘HMRC’).
HMRC are issuing 'nudge letters' to individuals whom they suspect have not paid the correct amount of tax on their crypto currency gains.
HMRC are using data from crypto platforms to track transactions and identify potential tax evaders. The letters caution that you could face interest and penalties if you fail to declare your crypto income or losses accurately. HMRC treats crypto as a capital asset, so you are liable for capital gains tax on crypto gains realised from buying and selling crypto, or using it for purchases.
If you receive one of these letters, it is important that action is taken to review your crypto transactions and, if you identify any issues, resolve the irregularities as soon as possible.
HMRC has a special disclosure process for crypto owners to rectify their tax situation, so if a disclosure is required, we can help you bring your tax affairs up to date using this disclosure facility.
If you require any assistance with reviewing your crypto transactions and replying to an HMRC nudge letter, please contact us.
