Here, UK revenue and customs tax authorities are ramping up their efforts to catch cryptocurrency tax evaders in an effort to uncover what they believe is a hidden wealth, according to UK accounting group UHY Hacker Young.
According to the group, the “real estate statement” template used for tax evasion surveys will now contain a section specifically targeting cryptocurrencies such as Bitcoin (BTC) and Ether (ETH) among others.
In addition to explicit cryptocurrency information requirements, the model reportedly will also include sections on other exchange systems, including the black market pesos used by the Mexican and Colombian cartels, as well as similar unauthorized currencies used in Africa, India and China.
HMRC suspects that more and more hidden wealth is slipping out of its hands thanks to the rise of cryptocurrencies and other unauthorized money transfer systems. David Jones, director of UHY Hacker Young, explained that this request for information is an important step in HMRC’s fight against it.
“The defense of ignorance of the law in this booming sector will no longer be justified by the tax inspector,” Jones added.
According to Jones, HMRC’s requirements for information about cryptocurrency holdings are not necessarily met. However, if someone fails to declare ownership of the cryptocurrency during an investigation, and authorities later discover their cryptocurrency wallet, they may now face additional criminal charges.
“While criminals can still not declare these assets, HMRC provides a new opportunity to hold them accountable if their forensics discover a hidden Bitcoin wallet,” Jones explained.