U.K. to Ask About Cryptocurrency Activity in Updated Tax Forms

LONDON (Capital Markets in Africa) — The U.K. tax office will begin demanding information on cryptocurrency holdings from individuals suspected of tax avoidance or evasion.

Her Majesty’s Revenue and Customs is set to update its “Statement of Assets” form, which all individuals being investigated must fill out, a spokeswoman for HMRC said Wednesday.

“We take robust action to make sure that everyone pays the tax due—from individuals operating in the hidden economy through to action against sophisticated organized crime groups, and complex investigations into offshore structures used to hide earnings and other assets,” she said.

The form will now explicitly demand whether an individual holds cryptoassets such as Bitcoin and Ethereum.

“HMRC suspects that an increasing amount of hidden wealth is slipping through its fingers thanks to the rise of cryptocurrencies and other unsanctioned money transfer systems. This demand for information is an important step in HMRC’s fight back against that,” said David Jones, director at accountancy group UHY Hacker Young.

Last year HMRC contracted a data analytics firm to help it analyses blockchain to help identify cryptocurrency wallets linked to illegal activities.

The tax office also sent information requests to cryptocurrency exchanges asking for information on the trading activities of their users.