HMRC has issued new basic guidance on how to make a voluntary disclosure of unpaid tax on income or gains from cryptoassets. The guidance is based around self-declaration that the underpayment resulted from:
innocent error, where reasonable care was taken (in which case the look-back period is four years);
carelessness (where the look-back period is six years); or
deliberate behaviour (where the maximum 20-year look-back period can apply).
The time limits here are based around HMRC’s extended powers to raise an assessment in cases of careless or deliberate behaviour, in TMA 1970 s 36.
Anyone who had income or gains from cryptoassets for previous tax years and did not include the relevant information in a self-assessment tax return will likely find the steps in the guidance onerous (particularly unrepresented taxpayers). Having self-declared the behaviour that led to the underpayment of tax, individuals will also need to work out what interest is due on the underpayment (HMRC notes that failure to include interest will result in rejection of the disclosure) and what penalties will apply. Penalties for inaccurate returns and penalties for failure to notify could both apply; individuals will also need to consider what range of penalty is likely to apply and whether a reduction can be given (e.g. for quality of disclosure). More helpfully, the guidance advises taxpayers to include white space notes to explain how they arrived at whatever conclusion they reached. HMRC has also published a new page on how and when to pay the tax.
HMRC has issued new basic guidance on how to make a voluntary disclosure of unpaid tax on income or gains from cryptoassets. The guidance is based around self-declaration that the underpayment resulted from:
innocent error, where reasonable care was taken (in which case the look-back period is four years);
carelessness (where the look-back period is six years); or
deliberate behaviour (where the maximum 20-year look-back period can apply).
The time limits here are based around HMRC’s extended powers to raise an assessment in cases of careless or deliberate behaviour, in TMA 1970 s 36.
Anyone who had income or gains from cryptoassets for previous tax years and did not include the relevant information in a self-assessment tax return will likely find the steps in the guidance onerous (particularly unrepresented taxpayers). Having self-declared the behaviour that led to the underpayment of tax, individuals will also need to work out what interest is due on the underpayment (HMRC notes that failure to include interest will result in rejection of the disclosure) and what penalties will apply. Penalties for inaccurate returns and penalties for failure to notify could both apply; individuals will also need to consider what range of penalty is likely to apply and whether a reduction can be given (e.g. for quality of disclosure). More helpfully, the guidance advises taxpayers to include white space notes to explain how they arrived at whatever conclusion they reached. HMRC has also published a new page on how and when to pay the tax.
