Crypto investors in the UK have been urged to check before the January 31 deadline whether they need to self-file a tax return for the 2022 to 2023 tax year, according to a January 9 statement from His Majesty’s Revenue & Customs (HMRC), the national tax authorities of Great Britain.
“The deadline for completing a tax return and paying any tax due is January 31, 2024,” HMRC added.
The regulator warned that failure to comply could result in an initial fine of £100 and possible additional costs.
Myrtle Lloyd, HMRC’s director general of customer services, highlighted the importance of including information about crypto-related income and gains in tax returns. He noted that individuals affected by these tax implications may not have previously filed tax returns, underscoring the need for thorough attention.
“People sometimes forget that information about crypto-related income and gains must be included in their tax returns. Some affected people may not have had to file a tax return before, so it’s important that people check this. With the self-assessment deadline just weeks away, I urge people not to delay completing it,” Lloyd said.
UK crypto tax
HMRC outlined specific criteria for tax liabilities relating to crypto transactions.
According to the agency, taxes may apply when individuals receive crypto assets from employment, including whether these assets are held as part of a trading activity or relate to income from crypto-related activities.
Additionally, taxes may be levied if users sell or trade their crypto assets for fiat money or other cryptocurrencies. Similarly, digital assets may have tax liabilities when purchased, gifted or donated.
Sanctions for defaulters
HMRC stressed the importance of submitting tax assessments on time and warned of possible penalties for delays or refusals.
If you do not submit the assessment on time, this may result in a fixed penalty of €100, regardless of the tax obligations.
Further delays of up to three months may result in daily fines of £10, capped at £900. In addition, a fine of 5% of the tax due or £300 (whichever is greater) may apply to those who are significantly behind on their taxes.
“There are also additional late fees of 5% of unpaid taxes after 30 days, 6 months and 12 months. Interest will also be charged on any tax paid late,” HMRC added.