The amount of tax potentially underpaid by cryptocurrency investors tripled between 2020 and 2021, according to data from HMRC.
The tax authority identified £428,000 in ‘tax under consideration’ on cryptocurrency investments in the year to March 31, according to a report published by HMRC.
This is in comparison with the £142,000 it identified in 2020.
Tax under consideration is the taxman’s initial estimate of how much tax may be at stake, not the final tax bill for any tax unpaid.
HMRC said: ‘We continue to develop our capabilities to better identify cryptoassets tax risks – and that work continues to improve through staff upskilling and better categorisation of related tax risks.
‘Tax under consideration is not tax owed or unpaid. It is an estimate of the amount at stake in an enquiry and is used by HMRC to manage the deployment of resources based on risks to revenues.’
Last month HMRC confirmed it will begin to send ‘nudge’ letters to holders of cryptoassets to remind them to pay the correct income and capital gains tax.