The HM Revenue & Customs - the tax authority in the UK- is moving its magnifying glass over cryptocurrency exchanges nowadays, requesting them to provide the agency with customers’ data, for tax-evasion inspection purposes, including names and the transactions associated.
August 07, 2019 | AtoZ Markets - Coinbase, eToro and CEX.IO were three cryptocurrency exchanges among others that received the formal requests to provide the HMRC with financial records.
The tax inspection authority is reportedly eyeing investors who made hefty profits trading cryptos around the time digital assets skyrocketed around two to three years back in the time.
Media resources quoted what they called “cited sources”, saying “If they [HMRC] do only go back two or three years, I think the interesting thing here is that the individuals who went into crypto very early on in 2012-13 will not be affected. The ones who probably made the largest gains won’t be affected, it will be the people who came in around the time crypto peaked.”
The HMRC stressed out that it has the upper hand in that context to claim such data, since such kind of trading is also taxable.
“These exchanges can retain information on their clients and the transactions that they have completed. These transactions may result in potential tax charges and HMRC has the power to issue notices requiring exchanges to provide this information.” As per sources.
The UK HMRC is ready for crypto taxation
The step comes based on the first detailed tax legislation directive for private cryptocurrency holders the inspector published last December after thorough consultation.
While the move harmonizes with what the U.S breeze regarding cryptos, it constitutes the complete opposite in other parts of the world, where Singapore was reported to have been studying the possibilities of exempting cryptocurrencies from the Value Added Tax, the term that is locally identified as “GST” there in the country.
It is worth mentioning that taxing cryptocurrencies has been given significance in financial officials’ talks and meetings, among which the G20 summit held by the end of the last year was one.