Her Majesty’s Revenue & Customs (HMRC), the United Kingdom’s leading authority on customs authority, tax, and payments, have allegedly turned to cryptocurrency exchange platforms for help in identifying cases of tax evasion. The department is said to have asked digital exchanges for information regarding the names and transactions of specific customers.
According to a Coindesk report, the HMRC has already sent requests to three of the country’s biggest exchanges – Coinbase, CEX.io, and eToro – to furnish them with a list of users and their transaction history.
Reports have claimed that the HMRC want to collaborate with digital exchange platforms as a means to identify citizens who are not paying their taxes. Sources have said that the tax agency will likely just go back two or three years.
Interestingly, this will not affect people who have already embraced crypto by 2012 – 2013. The request won’t affect the people who made the biggest gains, but it will impact those who came in at the time cryptocurrency has peaked.
Platforms Needs to Comply
Meanwhile, the HMRC is said to have confirmed making such requested and underscored that it’s within their competence to do so. The agency explained that crypto exchanges can preserve their customers’ data and their transaction records. These activities might result in possible tax charges, and the unit has the authority to issue notices that would demand digital exchange platforms to comply.
This stand of the HMRC is similar to what the US Internal Revenue Service did when it sent messages to 10,000 cryptocurrency investors and requested some of them to revise their tax filings while others were compelled to pay interests or back taxes.