- Coinbase UK customers have been informed that HMRC is after their income records
- The tax agency wants to know who received more than £5,000 ($6,470) in crypto in the last tax year on the platform
- The agency had initially wanted information going back to 2017
Coinbase customers in the UK have been informed that Her Majesty’s Revenue and Customs (HMRC) have asked for the names and addresses of anyone who received more than £5,000 ($6,470) in cryptocurrency into the platform in the last tax year. In an email sent by the platform on Friday, customers were informed that their information was being sent to the agency after the exchange had negotiated the terms of the data haul, and is another indication of the clamping down on crypto by tax authorities.
Coinbase Negotiated Terms Down from 2017-2019
The Coinbase email, sent on Friday, revealed that initially HMRC had asked them to “provide certain records from 2017-2019 relating to all customers of our UK business” but that the exchange had managed to reduce this scope after “discussions” with the agency:
…a revised notice with reduced scope was issued that now requires the disclosure of customers with a UK address who received more than £5,000 worth of crypto assets on the Coinbase platform during the course of the 2019/2020 tax year.
The scope includes cryptocurrency both bought on the platform and transferred into it, and is clearly an attempt by HMRC to catch those who are trying to hide income from them.
UK Customers Have Four Months Until Tax Deadline
The timing of the Coinbase exchange data haul is not accidental, coming as it does with UK taxpayers having four months left until the 2019/20 tax filing and payment deadline. Those gathered in the net can likely expect a letter in the coming weeks from HMRC reminding them of their obligations with regard to cryptocurrency earnings. They can also expect their reported income to be compared against their crypto usage on Coinbase once they have filed their tax return.
Richard Baldywn, accountant at British crypto specialists The Friendly Accountants, told FullyCrypto that the Coinbase email was targeting those who were actively trying to hide their gains, saying that, “I suspect this is more appropriate to those individuals who have continued to fly ‘under the radar’ and this encouraging them to disclose.”
HMRC’s action in obtaining this data from Coinbase is a reminder that the authorities are now well aware of the tax avoidance that goes on in the crypto space and is a sign that they are trying their best to both make up for lost time and not lose out going forward.