Digital assets are becoming more and more popular, and HMRC know this. So here is the latest news when it comes to HMRC and Cryptocurrencies.
HMRC is providing a chance for crypto investors to come forward and disclose unpaid taxes on cryptocurrency and NFT transactions going back four years. Penalties and interest will apply, but voluntary disclosure is deemed as a positive move.
Disclosures can be made online and must include specific information such as transaction details, exchanges used, and reasons for non-payment.
Payment must be made within 30 days of disclosure.
Failure to meet obligations could result in further penalties and asset investigations.
HMRC Encourages Transparency and Timely Payment
Taxpayers are urged to make accurate disclosures and payments to avoid potentially more severe consequences. HMRC is emphasising the importance of proper tax reporting for crypto and NFT transactions, signalling increased scrutiny in this area.
The Process Outline:
Disclosure:
Submit required information online, including transaction history, exchanges used, and reasons for past non-payment.
Indicate whether underpayment was due to reasonable care, negligence, or deliberate intention.
Assessment and Payment:
HMRC will review the disclosure and issue a payment reference number within 15 days. Payment must be made within 30 days. Discrepancies could lead to additional penalties.
Payment Arrangements:
If full payment is not possible, payment plans can be discussed, requiring disclosure of income, expenses, and assets.
Compliance Emphasis:
HMRC’s actions highlight the increasing focus on cryptocurrency tax compliance. Accurate reporting and timely payments are crucial to avoid penalties and potential enforcement measures.
Seek Professional Guidance:
For complex situations or uncertainties, consulting a tax professional is strongly recommended, so get in touch with us HERE to discuss your crypto and NFT tax needs.