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- HMRC will demand data on the crypto-holdings from any taxpayer it suspects of tax evasion.
- The rise of cryptocurrencies and other unsanctioned money transfer systems have empowered the accumulation and circulation of “hidden wealth.”
- One could face serious criminal charges if they fail to declare crypto-holdings during the investigation, and the authorities uncover later.
Her Majesty’s Revenue and Customs (HMRC), the tax authority under the United Kingdom governance, is decidedly ramping up its efforts to hunt and punish crypto-tax evaders and confiscate their “hidden wealth.” Reported Thursday, the London’s business daily City A.M. cites that “a crackdown had begun as scaremongering.”
HMRC Demands Crypto Holdings Details
UHY Hacker Young, one of the largest U.K.-based accountancy groups, on Wednesday, announced HMRC would demand data on the crypto-holdings from any taxpayer it suspects of tax evasion and avoidance. David Jones, Director of the association, explained that the tax office’s “statement of assets” will now include a section dedicated explicitly to information on cryptocurrency holdings.
Assets In Other Value Transfer Systems
As listed on the digital news platform londonlovesbusiness, the tax evasion investigations form will also demand details of assets in other ‘value transfer’ systems. It enlists:
- Cryptoassets: like Bitcoin (BTC) and Ethereum (ETH).
- Black Market Pesos: a sale currency converting system used by Mexican and Colombian drug cartels.
- Hundi: an Indian system of credit notes used by merchants.
- Hawala: similar to Hundi, common in the Middle East and Africa.
- Fei ch’ien: trust-based money transfer system, used in China’s hidden financial system.
- Assets in E-money wallets: like PayPal.
Illicit Circulation of Hidden Wealth
HMRC suspects that due to the uninterrupted “rise of cryptocurrencies and other unsanctioned money transfer systems,” a large amount of “hidden wealth” is being illicitly acquired and circulated. This information demand is “an important step” towards the authority’s counterattack against it, revealed Jones.
The UHY Hacker Young Director added, HMRC won’t accept “ignorance of the law” as the defense in this “booming sector.”
Offenders Won’t Get Another Chance
Jones also acknowledged that HMRC’s demand for crypto-holdings information might not be met; criminals can “choose to not declare” these assets. However, in case one fails to declare crypto-holdings during the investigation, and authorities later uncover, say for example, “a hidden Bitcoin wallet,” the offender could face some severe additional “criminal charges.”
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
