Following a bumper Capital Gains Tax (CGT) haul for HMRC last year in respect of Cryptocurrencies we’ve now had feedback from a number of exchanges and industry insiders that HMRC are now looking to identify those who have not declared and paid their tax.
Clients of ours have been invited to HMRC ’round table’ discussions to allow them to understand Crypto a little better. None of my clients were interested in sitting down with HMRC, but I’m sure many others will attend.
Many involved in Crypto have historically assumed that due to the inherent anonymity that the risks of HMRC discovering them were minimal, however, due to money laundering requirements of many exchanges, particularly in the UK and EU, many exchanges do hold the personal details of the investors.
I also feel that there’s a large number of ‘anti-establishment’ believers who again want to keep their assets outside of the eyes of government, however, any who have used major exchanges to transfer even small amounts of Crypto are at risk.
We’ve seen reports that eToro, Coinbase and CEX.IO have all been contacted to request data on customers and transactions which will obviously give HMRC a huge amount of data to chase unpaid taxes.
As such, if you were a Crypto investor who made a profit in 2017/18 (even if you subsequently lost all of the gains) and have not disclosed this to HMRC then you have until 31 January 2020 to disclose before the risk of much larger fines if they catch up with you.