Her Majesty’s Revenue and Customs, the UK’s tax authority, will step up its efforts to trap cryptocurrency tax evaders to uncover what it sees as hidden wealth, UK accounting group UHY Hacker Young has said.
According to the group, the ‘statement of assets’ form used in tax evasion investigations will now include a section specifically devoted to cryptocurrencies such as Bitcoin (BTC), Ether (ETH) and others.
In addition to explicit requests for information on crypto holdings, the form would also include sections dedicated to other exchange systems, including the black market peso used by Mexican and Colombian cartels, as well as similar unauthorized currencies. used in Africa, India and China.
“HMRC suspects that an increasing amount of hidden wealth is slipping through its fingers thanks to the rise of cryptocurrencies and other unauthorized money transfer systems. This request for information is an important step in HMRC’s response to this, ”said UHY Hacker Young director David Jones.
“A defense of ignorance of the law in this booming industry will no longer be taken into account by the tax authorities,” Jones added.
HMRC’s demand for information on cryptocurrency holdings is not necessarily being met, Jones says. However, if someone does not declare their cryptocurrency holdings during an investigation and authorities later discover a crypto wallet belonging to them, they could now face additional criminal charges.
“While criminals can always choose not to report these assets, it gives HMRC another opportunity to lay criminal charges against them if their forensic work finds a hidden Bitcoin wallet,” Jones explained.