UK Treasury Budget Wants to Expose Crypto Tax Avoiders
If you have ever been a fan of the TV show ‘Catch Me If You Can’ then you’re probably familiar with the kind of lengths people will go to evade tax. The UK Treasury Budget, discussed in an October 2020 Economic Update, wants to combat this behaviour by including a separate reporting of crypto assets in documents sent to the tax department.
Who Will be Affected?
Well, anyone who has a pile of cryptocurrency tokens stashed away (illegal, no doubt – I’m being sarcastic). Such people must declare all their profits when filing self-assessment tax returns according to the October 2020 economic update.
What Can Crypto Tax Avoiders Expect?
If you are found to be intentionally evading taxes with cryptocurrency-related transactions, you can expect a heavy fine and possible jail sentence. By having crypto-specific forms, HMRC can detect cases of tax avoidance and evasion efficiently and accurately.
What Are Crypto Assets?
Crypto assets can include anything from Bitcoin, Ethereum and Litecoin, to digital tokens issued via ICOs (initial coin offerings).
The Benefits of Separate Reporting
There are several benefits to requiring a separate reporting of crypto assets in tax documents. Here are a few:
- Increase Tax Compliance – Requiring crypto-specific tax forms could help HMRC achieve 100% accuracy when it comes to ensuring tax compliance.
- Faster Tax Audits – Separate reporting of crypto assets can also help speed up their investigation and audits process.
- Decrease Tax Avoidance – Having tax forms designed to detect crypto-related transactions could also help deter people from attempting to evade taxes.
Maybe having to die-pen in the numbers and regulations isn’t so exciting for those of us without a background in accounting, but it looks like the UK has been proactively trying to clamp down on tax avoidance with their October 2020 Economic Update.
So, whether you’re an innocent crypto investor or a tax avoider trying to make a quick buck, it looks like you’d better watch out if you don’t want to be one of those people on ‘Catch Me If You Can’.
