Do I have to owe taxes on my cryptocurrency portfolio?

I am for fun and without particularly high hopes to jump on the cryptocurrency train early on. I benefited from a price increase after the Lockdown and now have a fairly high -quality portfolio. I used my stocks to finance some unique purchases and exchange between currencies. I recently received a letter from HM Revenue & Customs, in which it is claimed that I may owe taxes. I am worried that I did something wrong. If I have never redeemed my portfolio, I still are still liable for the capital gains tax on the potential gain in pound sterling from my original investment?

Gary Ashford, partner and approved tax consultant of the British law firm Harbottle & Lewis, says that in most cases in which someone has invested in crypto assets, these "assets" are subject to the sale of capital gains tax (CGT) if the realized profit is over the threshold of £ 12,300.

cgt is due as a result of the sale, so if you have not made any sale, no CGT would be due. However, if you have exchanged crypto directly for other goods or even acquired new cryptocurrency, you have probably made some sales and possibly triggered CGT.

The HMRC approach is to apply the same rules as for stocks. The tax authority has secured data in terms of coins and tokens in the possession of individuals from a number of crypto exchanges, and this information that largely uses to identify and send them letters.

The letter is not an explanation that you have made something wrong, but a "nudge" to let you know that HMRC is aware that you keep crypto, and that if you have made it, these may be taxable and should be included in your annual financial statements. If you do not fill out an annual tax return, you may have to register and request one.

If you made orders in previous tax years and have no time to correct an earlier tax return, you can face fines. Since many people do not know that crypto is taxable, the maximum sentence may be 30 percent, which may be alleviated or exposed to zero by early disclosure.

However, if someone knew that crypto was taxable, the punishment can be up to 100 percent of the additional tax, with a minimum penalty of 50 percent.

penalties are not raised if someone kept "adequate care". However, this can be difficult to prove, since the HMRC could argue that you should always check whether the assets you have kept are taxable.

The most important thing is to act now. Do not ignore the letter and do not throw it in the trash. The HMRC shows records about everyone that it wrote to. So if you would do research at some point in the future, it would be difficult for a recipient of a letter of impetus to claim ignorance.

Do I have to repay Lockdown business subsidies?

last year, at the peak of the pandemic, I applied for several grants through the independent income support system (Seiss) to keep me and my family above water while my company could not act as usual. When the Lockdown decreased, my business began to recover and I stopped using the grants. I am filling out my tax return for the 2020-21 financial year. Do I have to repay the Seiss grants I have applied for and if so, how much and when?

ZENA HANKS, partner in the private-wealth team at Saffery Champness, says they were right to make the claims, as this was exactly the intended purpose of the Seiss subsidies-to support companies and individuals who have to struggle during pandemic. It was also true that you discontinued the application for the grants at the time that it was clear that your company had recovered and that you no longer needed the support.

The official guidelines available on the HMRC website state that the requirements that had to be met for subsidies 1 and 2 were less strict and only required that the company was "adverse". Applicants for all scholars had to indicate that compared to what could have been reasonably expected, they suffered from reduced activity, capacity or demand.

whether they have to pay back on their circumstances. For example, if your turnover has increased during one of the waiting times, you may have to pay back the grant. However, if it has increased because you have concluded an unforeseen contract or templates that gave you a late profit thrust, you will probably not have to make any repayment.

From your information on your circumstances and the likely schedules, it shows that it is not necessary to repay the amounts you require, but a thorough examination should be carried out to confirm this.

For the later scholarships, if some were applied for, the requirements were much more strict. The subsidies may have to be repaid if the company was not affected by the pandemic or if the figures given in their application were wrong and led to a higher premium than should be the case.

Consider this example of HMRC. "A host has fewer customers due to state restrictions, which reduces its income. They sensibly believe that this will significantly reduce the trading profits. They are entitled to fifth funding."

and this: "An electrician is still acting, but has increased costs through the purchase of masks, cleaning agents and screens. Depending on the circumstances,

In terms of reporting and paying the grants, the repayment of some or the entire grant can be used by your tax return for self -assessment. For the 2020-21 tax year, this would lead to a payment of the grant alongside any taxes that are due on January 31, 2022. However, the HMRC has announced that it will dispense with penalties for late submission and payment for taxpayers of self -assessment by the end of February.

In addition, the government directive also offers the opportunity to share HMRC whether you want to repay a part or the entire received grant voluntarily. In some cases, HMRC contacts taxpayers due to overpayments of the grants, so it is better to be HMRC one step ahead.

The opinions in this column only serve general information purposes and should not be used as a replacement for professional advice. The Financial Times LTD and the authors are not responsible for direct or indirect consequences that result from trust in answers, including any losses, and exclude liability in full.