Back in Spring 2023 we highlighted HMRC’s plans for greater scrutiny on the reporting of all crypto transactions including for cryptocurrencies and NFTs and they are now sending out nudge letters to remind individuals.
HMRC has access from trading platforms and exchanges about subscribers and will be comparing this data to declarations made on recent tax returns. Irrespective of how your crypto has performed, it is crucial to make sure you are reporting your crypto correctly, to get your tax right or to take advantage of valuable tax relief on any losses.
How are HMRC increasing their checks?
Since April 2024, all crypto sales will need to be separately identified on UK tax returns, meaning you must provide HMRC with more information when you submit your tax return.
This will give HMRC the opportunity to check your annual tax reporting against the data they receive directly, for example from crypto exchanges and other trading platforms.
What data does HMRC receive direct about crypto?
For the last couple of years HMRC have obtained the contact details of those trading in Crypto assets on the main crypto exchanges (like Coinbase, Binance or Kraken). Under UK regulations, to have UK customers, these exchanges are expected to disclose user data to HMRC.
