19th January 2024 Posted by - Alexander Accountancy
Paying tax on crypto asset transactions
HMRC recently launched a new campaign targeted at crypto investors as part of a crackdown on tax evasion. They have introduced a new disclosure and payment service for taxpayers to voluntarily disclose and pay any unpaid taxes associated with crypto assets.
Crypto assets (also known as tokens or cryptocurrencies) include exchange tokens (for example, bitcoin), non-fungible tokens, and utility tokens.
HMRC views the profits or losses incurred from buying and selling such crypto assets as liable for capital gains tax. Only in exceptional circumstances would they recognise crypto trading as a taxable ‘business’ trade.
Many who own crypto assets may not be aware of the tax obligations on these digital assets. This voluntary disclosure service provides an opportunity to put things right with potentially lower penalties than if HMRC discovers the underpayment for itself.
Such a discovery is likely to become easier for HMRC. Tax avoidance from using crypto assets is a subject of international concern, and there are moves to require crypto platforms to share taxpayer information with tax authorities.
If you or anyone you know needs any advice or help in this area, please don’t hesitate to contact us!
See: Source Gov.UK
