Pinsent Masons: How much does HMRC believe wealthy individuals owe in underpaid tax?

• Figures confirm HMRC is looking at tax affairs of cryptocurrency investors

New figures published today show HMRC has already identified £428,000 in tax it believes was underpaid by wealthy individuals on cryptocurrency investments last year, jumping 202% from £142,000 it believes was underpaid the year before, says Pinsent Masons, the international law firm.

Pinsent Masons says that given the growing popularity of cryptocurrency investment, this figure is likely to continue increasing quickly.

Other large increases in the amount of suspected underpaid tax by wealthy individuals includes:

• Capital Gains Tax – jumping 157% to £752m in the last year, up from £293m the year before
• Inheritance Tax – jumping 43% to £353m in the last year, up from £247m the year before

Steven Porter, Partner at Pinsent Masons says: “These figures confirm that HMRC is now actively looking for wealthy individuals evading tax on their cryptocurrency investments.”

“Even though these are only modest amounts at the moment we expect this to increase considerably.”

“HMRC’s ability to gather information on crypto holdings is seemingly still at an early stage but will no doubt increase, given the popularity of these assets. It seems likely that the next step will see HMRC increase international cooperation with overseas tax authorities to get more data from overseas cryptocurrency exchanges and brokers.”