HMRC is sending out ‘nudge letters’ to UK taxpayers who they believe may have failed to pay tax on their cryptoassets.
HMRC's strategy of sending targeted letters to taxpayers who they believe may have failed to deal with their tax affairs correctly has been extended to those holding cryptoassets.
The nudge letter gives the taxpayer a valuable opportunity to engage with HMRC to rectify any error or omission outside the formal enquiry process.
HMRC have gathered information from various sources which they will be checking against figures reported for tax purposes.
The tax treatment of cryptoassets can be complicated so we would always recommend seeking appropriate tax advice if you investing in them to check what should go on your Self Assessment Tax Return.
Nudge letters tend to be very vague and will not contain any specific information. However, should you receive such a letter you should assume that HMRC holds some data which suggests you may not have fully declared your tax liability. Should you receive one please do not ignore it as, if you do, HMRC could open up a investigation.
Please get in touch as soon as possible if you receive a nudge letter from HMRC or if you think you might have overlooked declaring some earlier gains.