The UK HM Revenue and Customs agency has contacted several locally registered cryptocurrency exchanges and demanded they provide information on customer transaction histories in order to determine the maximum taxable amount.
However, it’s important to note that the tax agency is in direct conjunction with the Financial Conduct Authority (FCA) and therefore has the authority to request this information. HMRC claims that such requests are within the scope of its competence:
“These exchanges can retain information on their clients and the transactions that they have completed. These transactions may result in potential tax charges and HMRC has the power to issue notices requiring exchanges to provide this information.”
Reportedly, the firms affected by the demand are Coinbase, CEX.IO and eToro.
Several third party companies that offer crypto payments and transactions are now anxious if they will also be required to provide customer crypto transaction histories. As such, a representative of Playamo, Amelia FORESTER has commented that:
“We have a lot of crypto transactions coming in from our Australia branch which we then diversify on our UK customer accounts. We don’t have a dedicated record system as most of the transactions happen through our Aussie casino welcome bonus features. Therefore if the HM Revenue and Customs were to approach us and demand transaction history, we’d have a hard time coming up with the data.”
Same concerns have been voiced by representatives from UK-based crypto lending and investment firms, saying that they don’t have a dedicated platform for recording these transactions for the sake of reporting them to the government. The state of the reporting departments in these companies could be the reason why FCA was forced to come out with crypto regulation guidelines this month.
Image courtesy of Live Coin Watch