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, HMRC will ask for more stringent information in their ‘statement of assets’ which asks to account for all taxpayers assets and investigation.  This information is looking for assets that could be used by organised crime.

The information asked for will include Bitcoin and Ethereum, PayPal, and assets in ‘value transfer’ systems such as Black Market Pesos which is used by Mexican and Colombian drug cartels, Hundi, used in India for credit-notes and Fei ch’ien, a Chinese money transfer system.

HMRC will prosecute if any assets are found in these channels as HMRC try to get to grips with problem.

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.


2,700 Self Assessment (SA) tax returns sent in on Christmas day

2,700 Self Assessment (SA) tax returns sent in on Christmas day

More than 2,700 customers filed their Self Assessment tax return on Christmas Day, HMRC has revealed.

The peak time for completing tax returns was 14:00 to 14:59, with more than 200 customers sending their online forms.

Because the Self Assessment deadline is on 31 January 2021, HMRC see thousands of customers using the Christmas period to complete and return their documents.  Customers are given the option to complete their tax returns online ahead of the deadline or at a time that suits them.

Once the tax returns are completed and submitted and the customers are informed of how much tax is owed by the HMRC, they can now setup a payment plan to spread the cost of their tax liabilities to the value of £30,000.

In total, 31,400 customers completed their 2019 to 2020 tax returns between 24 and 26 December:

  • Christmas Eve: 20,200 tax returns were filed. The peak time for filing was 11:00 to 11:59 when 2,892 returns were received
  • Christmas Day: 2,700 tax returns were filed. The peak time for filing was 14:00 to 14:59 when 214 returns were received
  • Boxing Day: 8,500 tax returns were filed. The peak time for filing was 15:00 to 15:59 when 858 returns were received
2,700 Self Assessment (SA) tax returns sent in on Christmas day

HMRC Advisory Fuel Rates (AFR) from 1st December

The 1st December 2020 Advisory Fuel Rates (AFR) have been cut by 1p per mile for petrol vehicles with engines of 1400-2000cc, while the diesel amount per mile for vehicles across all engine sizes remains unchanged.

The rates can only be applied to:

  • reimburse employees for business travel in their company cars; or
  • require employees to repay the cost of fuel used for private travel.

The advisory electricity rate for fully electric cars is unchanged at 4p per mile. Electricity is not a fuel for car fuel benefit purposes.

When employees are reimbursed for business travel in their company cars, HMRC will accept there is no taxable profit and no Class 1A national Insurance to pay.

Advisory fuel rates from 1 December 2020

Engine size Petrol – amount per mile LPG – amount per mile
1400cc or less 10p 7p
1401cc to 2000cc 11p 8p
Over 2000cc 17p 12p


Engine size Diesel – amount per mile
1600cc or less 8p
1601cc to 2000cc 10p
Over 2000cc 12p

Hybrid cars are treated as either petrol or diesel cars for this purpose.

HMRC reviews rates quarterly on 1 March, 1 June, 1 September and 1 December.

Tax is on HMRC’s menu for restaurants and takeaways

Tax is on HMRC’s menu for restaurants and takeaways

It has been announced that HMRC will issue thousands of letters to businesses it believes have made incorrect or suspicious claims under the Eat Out To Help Out scheme. At the beginning of November, three people were arrested in London linked to fraudulent claims. 

If you, or your client, receives one of these letters you will have 60 days to respond before HMRC start a full tax investigation. These letters should not be ignored. Please contact us straight away for advice on how to proceed. Even if there have been no errors in the claims HMRC will still need to be satisfied about that. 49,000 claims had been submitted to HMRC by 30 September with HMRC stating that 4,000 businesses will receive one of these “nudge” letters. 

Equally, if you know, or think, you or your clients may have made an incorrect claim please contact us for advice on how to make a disclosure to HMRC before they open an investigation or send you a letter. This will help reduce any penalties charged. If a voluntary disclosure is made within 90 days of the claim having been made then no penalty should be chargeable by HMRC. 

We are also aware that HMRC has received bulk data from Just Eat and this is being used during current tax investigations or to justify opening a new enquiry into the business. If the Just Eat income has not been disclosed in the business accounts and tax returns then HMRC will seek penalties and interest for any errors. For the most serious cases HMRC may prosecute for criminal tax evasion with a risk of prison and sever financial penalties. Again, we strongly advise that you or your client come forward first if there have been any mistakes – even if it has been deliberate. We can help you obtain an immunity from prosecution in the most serious of cases or help make a voluntary disclosure for the less serious problems.

Virtual Christmas parties are eligible for the annual function exemption

Virtual Christmas parties are eligible for the annual function exemption

Section 264 ITEPA 2003

With 2020 being a year of lockdowns, social distancing and working from home, the HMRC have made virtual company Christmas parties exempt from their annual returns.

Section 264 of ITEPA 2003 allows an exemption of a company annual event hosted by an employer at a cost of less then £150 per head  The annual events can be held at any time of the year and made available to all employees.

When calculating the event the employer can consider entertainment, food and drink, transport and accommodation and VAT.

The cost per head should be divided by the total expenses and the number of attendees.

The £150 is not an annual allowance, if the cost is exceeded then the whole amount will become taxable.

Virtual functions

Where an annual function is provided virtually using IT then the exemption is capable of being met provided all other conditions are also satisfied as the exemption applies to allow for costs of provision which are generally incurred for the purposes of the event itself.