HMRC have added a section to the ‘statement of assets’ form specifically for taxpayers to declare any holdings of Bitcoin and other cryptocurrencies. Taxpayers are being warned that they must add any holdings they have in Bitcoin or other cryptocurrencies to this section when completing the form.
Whilst it has always been a requirement to declare all assets to HMRC, there is now a specific question relating to crypto holdings.
Other assets added to the form include:
- electronic wallets
- online payment platform accounts
- electronic money accounts
- community and informal banking accounts
- foreign exchange accounts
- electronic accounts
- accounts connected to value transfer systems
- financial technology accounts
Cryptoassets are much harder for HMRC and authorities to trace, compared to traditional assets such as cash and shareholdings. Although cryptoassets may be harder to trace, HMRC are warning those who fill in the ‘statement of assets’ form, that the information will be checked.
Whilst it can be said that the majority of businesses and individuals pay the correct amount of tax owed, there is still a minority who refuse to pay what they owe.
A spokesperson for HMRC said: “We take robust action to make sure that everyone pays the tax due – from individuals operating in the hidden economy through to action against sophisticated organised crime groups, and complex investigations into offshore structures used to hide earnings and other assets.”
With the price of Bitcoin and other cryptocurrencies continually increasing at a rapid rate, many investors are highly likely to have made sizeable gains. It is important to note that capital gains tax will be due on gains that exceed the £12,300 annual allowance.
Whether you are an individual or a business, we can ensure you are complying with tax regulations surrounding cryptoassets.
At STS (Europe) we can offer advice to ensure tax compliance when trading with cryptoassets. We can also assist with the completion of self-assessment tax returns and ensure all profits are taxed in the correct manor.
If you are trading with cryptoassets and would like to know how we can help ensure you are tax compliant, get in touch with us via our contact page or call us on 01704 891676.