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  • Disclosure of historic crypto tax liabilities

    At ETC Tax, we are able to assist with disclosure of historic crypto activities to HMRC. We have been in regular contact with the internal departments at HMRC to understand their practice and policy towards historic disclosures and have significant experience in this area.

    Experience

    Having a tax specialist who is experienced with the issues relating to cryptocurrency can offer you peace of mind. We have been advising clients on their cryptocurrency tax affairs since 2017. Indeed, we were one of the first (if not the first) tax advisory firms to proactively seek to properly understand the crypto marketplace, and the tax treatment of crypto transactions. Since then, we have amassed significant experience in this area, working with clients with crypto portfolios of a few hundreds of pounds to hundreds of thousands of pounds.

    Expertise

    Since we advised our first client in 2017, we have continued to lead the way in this rapidly evolving area, ensuring we keep up to date with the latest developments, trends and even terminology! A number of our team are themselves active investors in cryptocurrency, and, as such we have first-hand experience of blockchain. We are even happy to take payment for our services in cryptocurrency.

    Helping you to focus on what’s important

    Our team can help you ensure that your cryptoassets are structured properly. We can assist in calculating your taxable gains or losses on your cryptocurrency disposals, and deal with your HMRC filing obligations thus ensuring you are fully compliant. We can also assist those who are in dispute with HMRC or who are non-UK domiciled who may have specific tax needs relating to this area.

    How can we help?

    We can work with clients to help them understand the tax liabilities arising as a result of their previous crypto investments, as well as advising on their filing obligations with HMRC, before helping them make a full and thorough disclosure. We ensure that any uncertainties or queries are addressed and pre-empt any possible enquiries by HMRC.

    Case study

    Mr. N was in employment with all of his tax liabilities deducted from his salary by his employer via PAYE. Mr N’s occupation was in IT and software developer working for a charity and also volunteering on a part-time basis, earning approximately £30,000 – £40,000 per year.

    Mr N. invested a small sum in cryptocurrency, regularly contributing and growing his portfolio with no expectation that this would generate any real returns. He was part of a community interested in the underlying applications this technology could have.

    However, a number of years later, cryptocurrency began gaining popularity and his portfolio grew into the £,000,000s. Having sold and reinvested his portfolio into a wider range of alternative coins, he was unaware of his tax obligations until members of the community began sharing their findings.

    Recognising the complexities of his affairs and his potential non-compliance, he sought out a suitable adviser familiar with the tax issues and practical issues involved in holding and participating in the cryptocurrency sphere.

    His main concern was the prospect of an intrusive and long-winded investigation by HMRC upon making a disclosure.

    We were able to offer Mr N the peace of mind that his affairs had been properly managed and removing the threat of a burdensome HMRC enquiry.

    Mr N is now modestly enjoying his newly found wealth, whilst continuing to work part-time for a charity, with the finality in respect of historic tax obligations.

    Help us to help identify what advice you need on your cryptoassets

    To assist our team in reviewing your position and to deal with your enquiry more efficiently, please complete our brief questionnaire, after which you will be asked to leave your contact details if applicable. This will enable us to get a better understanding of your current position, and to advise you correctly. Please ensure all fields are completed in as much detail as possible, as we may be unable to deal with your enquiry if we do not have all the information we need.
    Many thanks.

    Question 1

    Did you make a profit on the sale of cryptoassets exceeding the annual exemption for Capital Gains Tax during any tax year (£12,300 for 2020/21 tax year)?

    Question 2

    Did your gross proceeds from the sale of cryptoassets exceed more than 4 times the annual exemption in a single tax year (£49,200 for 2020/21 tax year)?

    Question 3

    Have you participated in any wider crypto activities such as ICO’s, hardforks, airdrops, peer to peer lending, margin trading, staking, gaming or mining? If so, please provide a brief description of the relevant crypto assets involved and the value received from these activities.

    Question 4

    When did you begin investing in Cryptocurrency and how much have you invested to date?

    Question 5

    Please provide an estimate of the current value of your portfolio to date.

    Question 6

    Have you previously declared all of your capital gains or profits to HMRC?

    Question 7

    Have you been regularly trading cryptocurrency – if so, please provide an indication of the number of trades on average per month?

    Question 8

    Are you able to obtain full records of your historic crypto transactions? If not, please provide an indication of the time periods for which records may be missing and an estimation of the number of transactions.