Crypto investors in the United Kingdom have been urged to check if they need to complete a Self Assessment tax return for the 2022 to 2023 tax year ahead of the Jan. 31 deadline, according to a Jan. 9 statement by His Majesty’s Revenue & Customs (HMRC), U.K.’s national taxing authority.
“The deadline to complete a tax return and pay any tax owed is 31 January 2024,” HMRC added.
The regulator warned that failure to comply could lead to an initial fixed penalty of £100 and possibly additional charges.
Myrtle Lloyd, HMRC’s Director General for Customer Services, emphasized the importance of including information about crypto-related income and gains in tax returns. He noted that individuals affected by these tax implications might not have previously filed tax returns, underscoring the need for thorough attention.
“People sometimes forget that information about crypto-related income and gains need to be included in their tax return. Some people affected may not have had to do a tax return before, so it is important people check. With the Self Assessment deadline just a matter of weeks away, I am urging people not to put off completing it,” Lloyd said.
UK’s crypto tax
HMRC outlined specific criteria for tax liabilities related to crypto transactions.
According to the body, taxes may apply when individuals receive crypto assets from employment, including whether these assets are held as part of a trade or are associated with income from crypto-related activities.
Furthermore, when users sell or trade their crypto assets for fiat money or other cryptocurrencies, taxation can arise. Similarly, digital assets may incur tax obligations when purchased, gifted, or donated.
Penalties for defaulters
The HMRC emphasized the importance of timely tax assessment filing, warning of potential penalties for delays or refusals.
Failure to submit the assessment promptly can incur a fixed penalty of £100, irrespective of tax liabilities.
Further delays of up to three months could lead to daily fines of £10, capped at a maximum of £900. Additionally, a penalty of 5% of the tax owed or £300 (whichever is higher) might apply to those significantly behind on their taxes.
“There are also additional penalties for paying late of 5% of the tax unpaid at 30 days, 6 months and 12 months. Interest will also be charged on any tax paid late,” HMRC added.
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- Source: https://cryptoslate.com/uk-crypto-investors-warned-of-tax-return-penalties-ahead-of-january-deadline/
