HMRC is reminding cryptoasset users to check if they need to do a Self Assessment tax return.

With the increasing adoption of cryptoassets, HM Revenue and Customs (HMRC) is advising individuals to be vigilant about potential penalties and determine their obligation to complete a Self Assessment tax return for the 2022-2023 tax year.

HMRC is encouraging all cryptoasset holders to declare any income or gains surpassing the tax-free allowance on their tax return. Tax liabilities may arise when an individual:

• Receives cryptoassets as part of employment, holds them as part of a trade, or is engaged in income-generating crypto-related activities.

• Sells or exchanges cryptoassets, which includes selling for money, exchanging one type of cryptoasset for another, using cryptoassets for purchases, gifting them to others, or donating them to charity.

The deadline for submitting tax returns and settling any owed tax is set for January 31, 2024.

Individuals uncertain about their obligation to file a tax return can utilize the free online tool available on GOV.UK for clarification.

HMRC offers a comprehensive range of online resources, including video tutorials on YouTube and support on GOV.UK, to assist customers in completing their tax returns. Self Assessment customers can conveniently submit their tax returns and settle any outstanding taxes online at GOV.UK.

The HMRC app, a free and secure platform, stands as the quickest and easiest means for customers to settle their tax bills. Information on various payment methods is available on GOV.UK.

For customers unable to make full payments, GOV.UK provides support and advice. HMRC may facilitate affordable payment plans, known as Time to Pay, for customers owing less than £30,000. Customers can arrange this themselves online by visiting GOV.UK and searching for “HMRC payment plan.”

HMRC will consider customers’ reasons for missing the deadline. Those providing a reasonable excuse may potentially avoid penalties. Late tax return penalties include:

• An initial fixed penalty of £100, applicable even if there’s no tax to pay or if the tax due is paid on time.

• Additional daily penalties of £10 after 3 months, up to a maximum of £900.
• A further penalty of 5% of the tax due or £300, whichever is greater, after 6 months.

• Another 5% or £300 charge, whichever is greater, after 12 months.

Additional penalties for late payments include 5% of the tax unpaid at 30 days, 6 months, and 12 months. Interest will also be charged on any overdue tax.

HMRC emphasizes the risk of falling victim to scams and advises against sharing login details, including those with tax agents. HMRC scams advice is available on GOV.UK for public awareness and protection.