In this week’s Enews we look at:

• Criminalising tax mistakes could hit low-income taxpayers
• 240 crypto millionaires revealed by HMRC data
• Growth outlook affected by weak business investment

HMRC’s proposal to make it easier to prosecute taxpayers could have a detrimental impact on low-income unrepresented taxpayers, warns the Low Incomes Tax Reform Group (LITRG).

The LITRG has raised concerns that HMRC has failed to fully explain why its proposal for a new criminal offence for providing reckless, untrue statements is needed for ‘direct’ taxes like Income Tax, or how it would decide which cases to prosecute.

At present, HMRC can only seek criminal prosecutions where taxpayers have acted dishonestly. These proposals could make it easier for HMRC to reclassify genuine mistakes as ‘reckless’, meaning cases currently dealt with through civil enforcement could become subject to criminal proceedings.

LITRG says it is unclear how taxpayers could challenge this distinction, and warns that low-income, unrepresented taxpayers could be unintentionally caught out by the plans.

Joanne Walker, LITRG Technical Officer, said: ‘We are not convinced that HMRC has made the case for such a wide-ranging and serious measure. The consequences of these proposals are severe. A two-year prison sentence and an unlimited fine are serious and potentially life-changing sanctions to apply to acts that fall short of dishonesty

‘We have a real concern about the effect these plans may have on low-income unrepresented taxpayers. They are least likely to be able to afford professional help, so least likely to be able to defend themselves against accusations they have acted recklessly

‘They are also more vulnerable to being taken advantage of by certain unscrupulous tax advisers who could make false claims for tax relief on their behalf that HMRC could decide to prosecute further down the line.’

Press release: Low Incomes Tax Reform Group

Declarations of over £1 million in capital gains from cryptoassets in the 2024/25 tax year were made by 240 individuals, according to data published by HMRC.

The tax authority said the group accounted for a total of £717 million in cryptoasset gains during 2024/25.

This data is published as part of HMRC's annual Capital Gains Tax statistics. It is the first time HMRC has published this specific data, following the introduction of a dedicated part of the self assessment return for cryptoasset capital gains.

In the 2024/25 tax year, there were 17,600 individuals making Capital Gains Tax-liable disposals of cryptoassets such as Bitcoin, Ethereum and Dogecoin, HMRC reported.

Collectively, these taxpayers reported total cryptoasset disposal proceeds of £13.8 billion and gains of £1.38 billion. The data also shows that around 87% of individuals reporting cryptoasset gains were male and around 13% were female.

James Murray MP, Financial Secretary to the Treasury and Paymaster General, said: ‘Taxes are due on cryptoasset gains just like any other gains, and we want to make sure people making gains from crypto know about what taxes they owe.

‘This important work is supporting the government's efforts to close the tax gap, so that everyone pays their fair share towards our vital public services.’

Press release: HMRC

The latest economic forecast published by the British Chambers of Commerce (BCC) has revealed that the growth outlook for the UK has been affected by weak business investment.

According to the BCC, GDP in 2026 is expected to grow by 1.0% (compared with 0.9% in the previous forecast), then 1.0% in 2027, rising to 1.3% in 2028.

The BCC expects inflation to peak at 3.6% by the end of the year, easing to 2.3% by the fourth quarter of 2027.

It also anticipates that business investment will contract by 0.2% in 2026 before recovering to grow by 0.4% in 2027.

Commenting on the forecast, David Bharier, Deputy Director of Economics and Insights at the BCC, said: ‘Our latest forecast paints an uncertain outlook for the UK economy. Businesses have absorbed another major geopolitical shock and shown real resilience.

‘But growth remains subdued, and rests on consumption, not investment. Net trade is also a drag in every single year of the forecast.

Press release: British Chambers of Commerce