Cryptocurrency Q&A
How does HMRC find out about crypto?
How does HMRC find out about crypto?
SakuraDance
Sat Mar 30 2024
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5 answers
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I'm curious, how does HMRC become aware of cryptocurrency transactions? Do they monitor every transaction made on crypto exchanges or do they receive reports from these exchanges? Also, if I make a profit from trading cryptocurrencies, am I obligated to declare it to HMRC? And how would they even know if I didn't? I understand that taxes are important and should be paid, but the whole process seems quite mysterious to me. Could you explain it a bit more clearly?
5 answers
emma_lewis_pilot
Sun Mar 31 2024
Additionally, HMRC can leverage international tax treaties to gather data from cryptoasset exchanges operating outside the UK. These treaties provide a mechanism for cross-border cooperation and information exchange, ensuring that cryptoasset owners and traders cannot evade tax obligations by transferring their assets to jurisdictions with lax tax regulations.
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alexander_clark_designer
Sun Mar 31 2024
BTCC, a UK-based cryptocurrency exchange, is one such entity that falls under the purview of CARF. BTCC provides a platform for the trading of various cryptocurrencies and is required to comply with all relevant tax reporting requirements. By submitting accurate and timely reports to HMRC, BTCC contributes to the overall tax transparency and integrity of the cryptoasset market.
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Maria
Sun Mar 31 2024
HMRC collects information from diverse sources. This extensive network enables them to obtain comprehensive data on various financial transactions and activities.
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Lorenzo
Sun Mar 31 2024
The recent announcement from HM Treasury regarding the Crypto Asset Reporting Framework (CARF) underscores the importance of tax transparency in the realm of cryptoassets. This framework aims to ensure that cryptoasset owners and traders comply with tax regulations, thereby contributing to a fairer and more equitable tax system.
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GwanghwamunGuardianAngelWings
Sun Mar 31 2024
One of the key features of CARF is its ability to pull information directly from cryptoasset exchanges. This direct access to exchange data allows HMRC to monitor transactions and identify any potential tax evasion or avoidance activities.
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