HMRC has rolled out a new initiative enabling taxpayers to voluntarily disclose unpaid tax on cryptoassets covering exchange tokens, non-fungible tokens, and utility tokens.
The tax authority has initiated contact with selected taxpayers engaged in cryptoasset transactions who may not have fulfilled their tax obligations.
Taxpayers must report transactions incurring capital gains during the 2022/23 or 2023/24 tax years via self-assessment returns or HMRC’s ‘real-time’ capital gains tax service.
To access the facility, users require a government gateway user ID and password, along with specific information for a comprehensive report submission.
Taxpayers must determine the number of years for which they need to declare unpaid tax, contingent on their past adherence to tax obligations regarding cryptoasset income or gains. The disclosure period could potentially span up to 20 years.
In light of these developments, HMRC advises those uncertain about disclosure to seek specialist advice. Further guidance on paying taxes for cryptoassets has been issued separately.
This disclosure facility launch aligns with the UK’s commitment to joining the Cryptoasset Reporting Framework (CARF). The CARF facilitates the automatic exchange of information on crypto exchanges among financial authorities.