Tax Crackdown: UK Authorities Target Crypto Users for Unpaid Taxes
The UK national taxing authority has asked crypto users to disclose any unpaid taxes they might have in order to avoid fines.
In a Wednesday announcement , HM Revenue and Customs (HMRC) asked crypto users to make a “voluntary disclosure of any unpaid tax” relating to income or gains from cryptoassets, including exchange tokens, NFTs, and utility tokens.
The government agency warned that users who fail to pay their taxes would face additional penalties.
“If you do not contact us to declare your unpaid tax, you could be liable to additional interest and penalties.”
The HMRC said before considering making a voluntary disclosure to the tax authorities, there are several key steps you need to take.
First, it is crucial to collect all the necessary information regarding the cryptoassets on which users owe taxes, including personal details such as your name, address, email address, and contact telephone number, as well as National Insurance number.
Additionally, users need to gather data on the number of cryptoasset transactions, the proceeds or income that they have not declared, and the number of years for which they need to disclose unpaid taxes.
The agency said the number of years users need to disclose depends on the circumstances surrounding their previous tax compliance.
If they can demonstrate that they took reasonable care but still failed to pay the correct amount, they will only need to address unpaid taxes for the past four years.
“If you did not pay enough because you did not take enough care, you must pay HMRC what you owe for a maximum of 6 years,” the agency said.
The UK government has been actively addressing policies related to artificial intelligence, financial technology, and the metaverse
