HMRC could investigate Cryptocurrencies data

HMRC could investigate Cryptocurrencies data

HMRC is to begin collecting data on holdings of cryptocurrencies from taxpayers it suspects of tax evasion and avoidance.

With the recent surge in interest and value in cryptocurrencies, UHY Hacker Young explains that HMRC’s ‘statement of assets’ form (used to demand a complete accounting of all a taxpayer’s assets in an investigation) will now include explicit demands for information on cryptos and other assets commonly used by organised crime.

The information that will demanded will include details on cryptoassets such as Bitcoin and Ethereum, assets in E-money wallets like PayPal’ and assets in ‘value transfer’ systems such as Black Market Pesos, a system allegedly used by Mexican and Colombian drug cartels, Hundi, an Indian system of credit notes and Fei ch’ien, a trust-based money transfer system commonly used in China’s shadow financial system.

Those who are found to have concealed assets from HMRC can expect to be prosecuted. This new demand for data on these assets is an attempt by HMRC to get to grips with the problem.


The news from HMRC comes after NatWest, the UK retail bank, announced in April 2021 that it will not engage with business customers who accept payment in bitcoin or other cryptocurrencies. HSBC has also confirmed that it will not allow transfers from digital wallets or enable customers to buy shares in companies associated with cryptocurrencies, such as Coinbase or MicroStrategy.

Both banks states that cryptocurrencies are high risk and therefore justify a cautious approach, though they note that their stance could change when regulation evolves.

Jones added: ‘Some assets like Black Market Pesos are almost exclusively used by organised crime but criminal proceeds flow through relatively mainstream assets like Bitcoin at a rate that some find alarming. For example, cybercriminals overseas take virtually all of their ransom payments in Bitcoin to avoid detection. While criminals can still choose to not declare these assets, doing so gives HMRC another opportunity to bring criminal charges against them if their forensic work finds a hidden Bitcoin wallet.’

The initial cryptocurrency guidance was released back in 2018 after a special report was submitted by the Cryptoassets Taskforce which was an initiative launched by the HMRC in collaboration with the Financial Conduct Authority (FCA) and Bank of England.

HMRC views cryptocurrency as a digital currency and when it comes to taxation, HMRC treats it as an asset. This means that disposal of crypto is subject to capital gains tax.

Football agents fees resolved by HMRC

Football agents fees resolved by HMRC

Football agents who work on behalf of the footballer and the club they are brokering the deal with, which is called ‘dual representation’, have been subject to revised guidelines by HMRC.

A normal transfer scenario would see the football club pay the full fee to the agent, with part of the sum being paid on behalf of the player, and taxed as a benefit in kind.  HMRC will be scrutinizing any P11D claims that they do not feel are accurate for the intermediary fees that the club has paid on the player’s behalf.

In the past, there was a dual representation of a 50/50 equal split of the fee payable, between the services on behalf of the player, and the services on behalf of the club.  The player would pay tax on the services on his behalf but not for the share of the club.  This would give some transparency for every negotiation

HMRC have now changed their stance on these guidelines and will now look more into what a player has agreed to pay their agent in their representation contract and also ask clubs to justify the involvement they have made between the services provided to club and player.

HMRC will ask that clubs, agents and players to log all documents and discussions whilst negotiating the transfer until completion.  HMRC expect the clubs and agents to retain a significant amount of evidence.