HMRC is asking about my crypto, who helps me substantiate it?

What Paucitas does

We establish which holdings you had on which date, per wallet and per coin, and reconstruct how those holdings were built up. One example: someone had traded on three exchanges over four years and moved balances to a hardware wallet in between. By taking all the addresses together and reconstructing the transactions per tax year, it became visible that the growth came from price movement and not from new deposits.

It helps to know the frame. In the UK, gains on crypto are usually subject to Capital Gains Tax when you sell, exchange, spend or give away tokens, and income from crypto can be subject to Income Tax instead. HMRC therefore asks about disposals and pooled costs per tax year, which runs from 6 April to 5 April, rather than about a balance on a single date. See HMRC: check if you need to pay tax when you sell cryptoassets.

HMRC asks about crypto: what do you supply?

If you receive a letter asking for evidence, it is rarely about a single document. What is usually asked: which addresses and accounts did you hold, what was on them on the dates in question, how were those holdings built up and where did the money you started with come from.

Paucitas turns that into something checkable: an overview per address and per token with the position on the dates requested, a timeline from first deposit to today, and a transaction hash or export line as the source for every line. Points that cannot be substantiated are named separately, so your adviser can explain them up front rather than be questioned about them later.

Paucitas establishes the facts and records them. The tax assessment and the return itself remain with you or with your tax adviser.

What you supply

You supply Paucitas with the letter or the request you received, the exports from your exchanges, the addresses of your wallets and the bank statements of your deposits and withdrawals. The letter itself matters most, because it defines which years and which question are in play.

Bank statements of your deposits and withdrawals belong in the set as well. They tie the on-chain holdings to you personally, and they usually explain the differences between years that HMRC has noticed.

What you receive

You receive from Paucitas a transaction overview per tax year with pooled costs in pounds sterling, a balance specification on any date that is asked for, and an account of the method and the price source used. The step that is often underestimated is the treatment of staking and airdrop receipts: those fall outside the ordinary purchase timeline and have to be visible separately.

Three documents settle most requests: a transaction overview, a balance specification where one is asked for, and an account of the method and the price source. HMRC’s questions about crypto are usually about two things, the gains or income in a tax year and the origin of the holding, and a file that answers both in that order rarely needs a second round.

Staking and airdrop receipts are handled separately in the overview. They fall outside the ordinary purchase timeline, and folding them in is the mistake that most often produces a follow up question.

How to get started

Contact Paucitas with the question that was asked and the period it covers. Deadlines set by HMRC are rarely long, so an early message helps. Write through the contact page and attach the letter if you can.

Deadlines set by HMRC are rarely long, so an early message helps. Attach the letter if you can; it defines which years and which question are in play, and that determines the whole scope.

Would you like to know what this means for your situation? Ring us on +31 20 244 5774, day or night, or fill in our contact form and you will hear from us within 1 to 3 hours. We answer emails within 24 hours, usually the same day. The intake is free and without obligation.