Her Majesty’s Revenue and Customs (HMRC) is all geared up to crackdown on crypto tax evaders from the next month as it is providing a contract worth £100,000 for a tool that can detect when cryptocurrency is being employed to evade paying taxes.
In a statement, the UK tax watchdog HMRC said that the payment facilities that cryptocurrency offers can be misused for money laundering as well as tax evasion.
Indicating that cryptocurrency assets. which include Bitcoin and Ethereum, offer a medium to transfer value between the parties involved, UK’s HMRC said that these facilities are being greatly used to for an array of activities that include money transfers across the globe, marketing of digital services, paying staff, money laundering and of course, tax evasion.
According to the contract, UK’s HMRC is particularly exploring a software that can assist the organisation in monitoring seven cryptocurrency assets such as bitcoin (BTC), bitcoin cash (BTC), ether (ETH), ether classic (ETC), XRP, litecoin (LTC) and Tether (USDT) stablecoin.
Apart from that, the tax authority is also seeking a software that has the wherewithal to keep a tab on privacy-based coins such as Monero (XMR), Zcash (ZEC), and Dash (DASH).
The UK tax watchdog’s latest revised tax policies on cryptocurrency-related activities state that most crypto asset operations fall under the ambit of “taxable economic activity”. It includes cryptocurrency mining along with marketing, purchasing and bartering of a particular digital asset for another kind.