UK revenue authority to target cryptocurrency tax evaders
The UK tax authority, Her Majesty’s Revenue and Customs, is stepping up its efforts to catch cryptocurrency fraudsters in an effort to uncover hidden wealth, reports UK accountancy group UHY Hacker Young.
According to the group, the asset declaration form used in tax evasion investigations will now include a section on cryptocurrencies such as Bitcoin (BTC), Ether (ETH) and others.
In addition to the explicit request for information on the ownership of cryptocurrencies, the form would include sections on other exchange systems, including pesos used on the black market by Mexican and Colombian cartels, as well as similar illicit currencies used in Africa, India and China.
HMRC suspects that a growing amount of hidden wealth is escaping its notice thanks to the rise of cryptocurrencies and other illicit money transfer systems. This disclosure requirement is an important step in HMRC’s fight against this phenomenon, says David Jones, director of UHY Hacker Young.
Defending ignorance in this booming industry will no longer help taxpayers, Jones said.
According to Jones, HMRC’s request for information on the ownership of cryptocurrencies will not necessarily be met. However, if someone fails to report possession of cryptocurrencies during an investigation and authorities later discover a wallet containing cryptocurrencies belonging to them, they can now face additional criminal charges.
Although criminals may still fail to declare these assets, the HMRC is giving another chance to bring criminal charges against them if their forensic investigators discover a hidden bitcoin wallet, Jones said.
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