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Prepare for HMRC cryptoasset enquiries?

06 August 2020

HMRC now receives information from crypto exchanges on transactions carried out by cryptoasset investors based in the UK, and may also receive information on cryptoasset transactions under the Common Reporting Standard.
It will be using this information to help check whether taxable transactions have been correctly reported and subjected to tax, including capital gains tax on gains, and income or corporation tax on profits, mining fees and other earnings.
In many cases, HMRC will not receive the full details it needs to check all tax implications, so it will very likely be requesting further information from individuals and companies in the course of its enquiries.
As a first step, clients should ensure that they retain all information that might be requested, including: 

  • Type of cryptoasset
  • Date of the transaction
  • Purchase/sale details, including number of units and value of the transaction
  • Cumulative totals of investment units held
  • Bank statements and wallet addresses.

Clients should check that they have correctly reported any taxable transactions - see How cryptocurrencies are taxed for individuals and How cryptoassets are treated for business tax purposes.
If it appears that tax has not been accounted for, a voluntary disclosure to HMRC is generally the best course, in order to obtain the best possible settlement terms, including minimising penalties and interest.

Please contact Christopher Mann for further information on cryptoassets, or Matthew Watkins or Richard Morley for further information or assistance on making a voluntary disclosure.

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