HMRCS NFT confiscates A Warning to investors and tax fraudsters

The confiscation of non -fungible tokens (NFTS) by HM Revenue & Customs In a suspected fraud, will serve as a deterrent for criminals that hope to hide their activities in crypto, warn tax experts.

The step signals the growing ability of the authorities to penetrate the markets for digital currencies in order to pursue alleged tax fraudsters and other lawbreakers, they say.

The HMRC today confirmed that it was the first British law enforcement authority to confiscate NFTS. The tax authority said that it had obtained a judicial order to arrest crypto assets worth around £ 5,000 and three NFTs with digital works of art that still need to be evaluated.

The step is part of an investigation of a suspected, organized VAT fraud (VAT), in which 250 presumably fake companies are involved. Three people were arrested because of the suspicion of trying to defraud HMRC with £ 1.4 million. The development was first reported on the Daily Telegraph.

experts said the measures of the HMRC showed an increasing ability to pursue and pursue crypto-assets, to proceed against alleged tax evasion and to ensure that individuals pay the correct tax.

"Great Britain demonstrates increasing sophistication in his ability to confiscate crypto systems," said David Carlisle, head of guidelines and regulation matters at the blockchain analysis company Elliptic. "This is a big profit for HMRC and shows that the authority quickly and effectively adapts to the developing criminal techniques in this area."

NFTS are essentially digital property certificates registered in a blockchain for virtual assets such as digital works of art or physical assets such as art, music and videos.

Gary Ashford, a former tax inspector and partner of the Harbottle & Lewis law firm, said that the HMRC's step was probably aimed at reminding people that crypto profits are taxable, and to deter everyone who wants to rear tax.

"Many people will have thought that the HMRC would never have been able to find out what they did [with their crypto assets] but HMRC found it out," he said.

Chris Chapman, partner at Mayer Brown, another law firm, added that the development showed the "willingness and ability of the HMRC to confiscate crypto-assets".

He warned the investors to expect a stronger regulatory and tax test from the authorities, since crypto assets are becoming increasingly popular.

Nick Sharp, deputy director of economic crime at HMRC, said: “Our first confiscation of a non -fungable tokens serves as a warning for everyone who believes that they can use cryptoassets to hide money from HMRC. to hide. “

The HMRC has worked in recent years to combat alleged tax avoidance and evasion with crypto assets. This means that data from crypto exchanges are requested via their users and "Nudge" letters are sent to crypto holders in which they are asked to check their tax position.

The tax authority has also published guidelines on how individuals show records of crypto transactions and should report and pay all taxes due to assets. This month she published new guidelines for taxing cryptocurrency transactions in connection with decentralized finances.

In general, everyone who sells crypto-assets is subject to profits (CGT) for profits-above their annual CGT allowance (currently £ 12,300). Under certain circumstances in which the HMRC considers the purchase and sale of crypto assets as "trade", however, they can be subject to income tax and social security. This is based on the frequency and complexity of the transactions.

Individuals must have records about their transactions and report all due taxes on their annual self -assessment declaration.