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Where Taxpayers and Advisers Meet

What disclosures do I need to make on SA to minimise risk of HMRC enquiry?

mcplums
Posts:1
Joined:Wed Sep 19, 2018 10:59 am
What disclosures do I need to make on SA to minimise risk of HMRC enquiry?

Postby mcplums » Wed Sep 19, 2018 11:05 am

I have capital gains from selling bitcoin.

I've been reading about term limits on HMRC enquiries, and my understanding is that HMRC are not allowed to open an enquiry into your self assessment beyond the 12 month deadline if you have made the appropriate disclosures.

So, how do I achieve this? What disclosures should I make, beyond what is self explanatory from the boxes on the return?

Thanks!

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: What disclosures do I need to make on SA to minimise risk of HMRC enquiry?

Postby pawncob » Thu Sep 20, 2018 12:56 pm

Just complete the return. The phrase catches those who don't make a complete return.
With a pinch of salt take what I say, but don't exceed your RDA

wamstax
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Location:Operate Nationally but based in Aberdeen
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Re: What disclosures do I need to make on SA to minimise risk of HMRC enquiry?

Postby wamstax » Thu Sep 20, 2018 1:04 pm

In case it is relevant HMRC might not be able to open an enquiry after 12 months from filing (or up to 15 months of late filed) however they have the powers to make assessments to recover any unpaid tax for up to 4 years after the year of assessment ( and in case of careless or deliberate tax evasion up to 6 and 20 years) if they subsequently discover that amounts of income or gains that should have been subjected to tax were not.
regards and hope this helps
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AGoodman
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Joined:Fri May 16, 2014 3:47 pm

Re: What disclosures do I need to make on SA to minimise risk of HMRC enquiry?

Postby AGoodman » Fri Sep 21, 2018 1:27 pm

If you are thinking about leaving crypto profits out of account entirely (on the basis, say, they are highly speculative) and only mentioning them in the whitespace for disclosure purposes, bear in mind that this does not necessarily protect you from penalties.

If HMRC took up the issue, you might be called upon to show that you had taken reasonable care and therefore that you had a good and reasonable argument for the position you take. Simply saying it was a speculative investment or referring to blogs etc may not cut it. The definition of gambling requires more than just a transaction being high risk.

Without wishing to put the fear of god into you, HMRC could argue that crypto is a foreign asset (there is some statutory support for this for CGT) and so penalties start at 100%...That's probably unlikely if you've disclosed all the details.

HMRC's general position still appears to be that in Briefing 9 (2014):

"Chargeable gains: CT and CGT - if a profit or loss on a currency contract is not within trading profits or otherwise within the loan relationship rules, it would normally be taxable as a chargeable gain or allowable as a loss for CT or CGT purposes. Gains and losses incurred on Bitcoin or other cryptocurrencies are chargeable or allowable for CGT if they accrue to an individual or, for CT on chargeable gains if they accrue to a company."

That briefing raised the possibility of gains being treated as gambling profits but their general view was that stated above and the prevailing view of tax professionals is that profits are chargeable (IT if trading but in most cases CGT).


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