Unpaid tax from cryptocurrency transactions targeted

HMRC is writing to individuals who may need to pay tax on the disposal of cryptoassets such as Bitcoin. Why might tax be due and what should you do if you receive a letter?

Unpaid tax from cryptocurrency transactions targeted

HMRC is currently writing to individuals who have disposed of cryptoassets because the tax treatment is widely misunderstood and therefore tax may have been underpaid.

Most will understand that tax may be due if there is a capital gain once cryptoassets have been sold for cash. However, each time a cryptoasset is disposed of a capital gain may be triggered. This would include the following events:

  • using cryptocurrency to purchase goods or services
  • exchanging one type of cryptoasset for another; or
  • gifting cryptoassets. 

In certain circumstances, income tax and NI may be payable. If you receive such a letter from HMRC, you must take action within 60 days even if no tax is due. If you submitted a tax return, the return should be amended where possible. If you did not submit a tax return, or the deadline has passed, you should use the dedicated disclosure service to inform HMRC. 

Further guidance on taxable cryptoasset transactions can be found here.