HMRC Cryptoasset Disclosure Facility

If you've received a letter from HMRC regarding any unpaid taxes related to income or gains from cryptoassets, consider using the Cryptoasset Disclosure Facility. Here we explain everything you need to know about the Cryptoasset Disclosure Facility and how Tax Dispute Experts can assist you.

Expert Guidance

Our skilled team will guide you through the Cryptoasset Disclosure Facility, ensuring you fully understand the process and meet all HMRC requirements.

Accurate Disclosure

We will help you accurately report your online income and rectify any previous discrepancies, aiming to minimise any potential penalties.

Negotiation with HMRC

Our specialists will negotiate directly with HMRC on your behalf to secure the best possible outcome, working to resolve the matter efficiently and cost-effectively.

What is the HMRC Cryptoasset Disclosure Facility?

The HMRC Cryptoasset Disclosure Facility is designed to help taxpayers disclose any unpaid taxes related to income or gains from cryptoassets. This includes digital assets such as exchange tokens (e.g. Bitcoin), non-fungible tokens (NFTs), and utility tokens. If you have not reported your cryptoasset income or gains, this facility provides a structured way to correct your tax records and settle any outstanding liabilities.

Who Can Use This Facility?

This disclosure facility is available to a wide range of taxpayers, including:

Individuals
Executors
Trustees
Partnerships

If you have any unpaid income tax or capital gains tax arising from cryptoassets, you can use this facility to rectify your tax affairs.

HMRC nudge letters related to crypto

HMRC has been sending out nudge letters regarding cryptoassets. For more information, read our article on HMRC Crypto Letters and Investigations.

Time Limits

The time limits for making disclosures depend on the nature of your reporting error:

If You've Taken Reasonable Care
You only need to disclose unpaid taxes for the last four years if you took reasonable care to ensure your tax affairs were correct but still made an error. You must:

Accurately report your current and future tax years on your tax returns by the deadline if issued to you.
Report the year before the current tax year on the tax return by the deadline if issued to you.
Fill in the disclosure form and pay what you owe for the three years before this one.

If You Did Not Take Care
If you did not pay enough tax because you did not take enough care, you need to disclose taxes for the last six years. You must:

Accurately report your current and future tax years on your tax returns by the deadline if issued to you.
Report the year before the current tax year on the tax return by the deadline if issued to you.
Fill in the disclosure form and pay what you owe for the five years prior to this one.

If You Deliberately Misled HMRC
If your actions were deliberate, you may need to disclose up to 20 years of unpaid taxes, dating back to the 2009/10 tax year. Deliberate actions mean you knew you owed tax but chose not to tell HMRC or submitted incorrect figures on your tax return.

How to Work Out Your Tax, Interest, and Penalties

To accurately disclose your tax liabilities, you will be required to:

Calculate Capital Gains Tax and Income Tax: Determine the gain you made after applying your personal allowance. Accurate calculations are crucial.
Determine Interest: Interest is charged daily from the date tax is due until it is paid. Use the penalties and interest calculator to compute the interest due.
Assess Penalties: Determine the appropriate penalty percentage and apply it to your disclosure.

Due to the complexity of these calculations and the potential for significant financial implications, we strongly recommend seeking professional help to ensure your disclosure is accurate and complete.

Why Seek Professional Help?

The taxation of cryptoassets is complex, and the rules surrounding the disclosure facility can be intricate. A qualified and experienced tax professional, such as Tax Dispute Experts, can provide crucial assistance in:

Preparing the necessary documentation
Calculating accurate amounts of tax, interest, and penalties
Navigating the disclosure process smoothly

A specialist can help ensure that your disclosure is handled correctly and that you avoid common pitfalls.

How We Can Help

At Tax Dispute Experts, we specialise in helping clients navigate the complexities of tax disclosures. If you need assistance with the HMRC Cryptoasset Disclosure Facility or any other tax matters, our team of experienced professionals is here to help. Contact us today to schedule a consultation and ensure your tax affairs are in order.