Tax return reminder for cryptoasset users

With use of cryptoassets growing, HM Revenue and Customs (HMRC) is urging people to avoid potential penalties and check if they need to complete a Self Assessment tax return for the 2022 to 2023 tax year.

Anyone with cryptoassets should declare any income or gains above the tax-free allowance on a tax return. Tax may be due when a person:

• receives cryptoassets from employment, if they’re held as part of a trade, or are involved in crypto-related activities that generate an income
• sells or exchanges cryptoassets, including:
  • selling cryptoassets for money 
  • exchanging one type of cryptoasset for another 
  • using cryptoassets to make purchases 
  • gifting cryptoassets to another person 
  • donating cryptoassets to charity 

Visit GOV.UK to find out more information about how cryptoassets are taxed.

The deadline to complete a tax return and pay any tax owed is 31 January 2024. If customers are unsure whether they need to complete a tax return, they can check by using the free online tool on GOV.UK.

HMRC has a wide range of resources online including a series of video tutorials on YouTube, help and support on GOV.UK, to support customers in completing their tax return.

Self Assessment customers can submit their tax returns and pay any tax owed online at GOV.UK.

HMRC’s free and secure app is the quickest and easiest way customers can pay their tax bill. Information about the different ways to pay can be found on GOV.UK.

Customers who are unable to pay in full can access support and advice on GOV.UK. HMRC may be able to help by arranging an affordable payment plan, known as Time to Pay for customers who owe less than £30,000. Customers can arrange this themselves online. Go to GOV.UK and search “HMRC payment plan” for more information.

HMRC will consider a customer’s reasons for not being able to meet the deadline. Those who provide HMRC with a reasonable excuse may avoid a penalty. The penalties for late tax returns are:

• an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time
• after 3 months, additional daily penalties of £10 per day, up to a maximum of £900
• after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater
• after 12 months, another 5% or £300 charge, whichever is greater

There are also additional penalties for paying late of 5% of the tax unpaid at 30 days, 6 months and 12 months. Interest will also be charged on any tax paid late.

Everyone should be aware of the risk of falling victim to scams and should never share their HMRC login details with anyone, including a tax agent, if they have one. HMRC scams advice is available on GOV.UK.

Further information

More information about Self Assessment

Customers with cryptoassets will need to complete a Self Assessment tax return in pound sterling where:

• their total taxable gain is above the annual tax-free allowance
• they receive cryptoassets from employment and Income Tax and National Insurance contributions have not been paid through PAYE
• their total income is above the annual tax-free allowance they receive, including income from crypto-related activity

Visit GOV.UK for guidance on how to pay tax on cryptoassets.

Source: HM Revenue & Customs

If you require assistance with your accounting or self assessment, there is still time before the deadline for submission. Please give us a call now.