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.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said:
People sometimes forget that information about crypto-related income and gains need to be included in their tax return. Some people affected may not have had to do a tax return before, so it is important people check. With the Self Assessment deadline just a matter of weeks away, I am urging people not to put off completing it.
Help is at hand – you can access a wide range of resources and support online, just search ‘help with Self Assessment’ 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.
During January, we’re supporting customers who have queries about Self Assessment payments, repayments and who need help completing their tax return on our helpline. For all other queries go online where you’ll find guidance, videos and tools that will help you. Go to GOV.UK and search ‘Self Assessment’.
HMRC wants to help you get your tax right. Lots of information and support is available online which includes:
The small minority of customers who require extra support or struggle to engage with us digitally can still speak to an adviser.
Customers should include their bank account details when filing, so that if HMRC needs to make a repayment, they can do so quickly and securely.
It is important that customers let HMRC know of any changes to their circumstances. Customers can use the HMRC app to update their details including a new address or name. Customers also need to let us know if they’ve stopped being self-employed or need to change their business details. This can be done online at GOV.UK.
