- HMRC doubles warning letters as UK intensifies crypto tax enforcement.
- Over 65,000 crypto investors targeted in HMRC tax crackdown.
- New data-sharing rules to tighten HMRC oversight on digital assets.
The UK tax authority, HM Revenue & Customs (HMRC), is stepping up its campaign against unpaid cryptocurrency taxes. According to a Financial Times report, the number of letters sent to crypto investors suspected of tax non-compliance has more than doubled compared to the previous year.
HMRC has reportedly issued about 65,000 “nudge letters” to individuals believed to owe capital gains tax on their crypto holdings for the 2024–2025 tax year. This marks a sharp rise from 27,700 letters sent in 2023. The correspondence serves as a warning to investors, urging them to settle any outstanding liabilities before formal investigations begin.
The increase in enforcement aligns with the growing popularity of digital assets across the UK. Data from the Financial Conduct Authority (FCA) reveals that around 7 million UK adults now own cryptocurrency, up from 5 million in 2022. The total value of these holdings has reached an estimated £12.9 billion, reflecting a £5.1 billion increase in just two years.
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Enhanced Data Access Strengthens HMRC Oversight
HMRC’s ability to track cryptocurrency transactions has significantly improved through direct access to data from major exchanges. Starting in 2026, the department will gain automatic access to global exchange data through the Organisation for Economic Co-operation and Development’s Crypto-Assets Reporting Framework (CARF).
This initiative will allow tax authorities to identify individuals who have not reported their digital asset gains. Experts warn that with greater access to international data, it will become increasingly difficult for crypto investors to evade scrutiny.
Under current tax rules, UK residents must pay capital gains tax on profits exceeding the annual allowance of £3,000. Those trading crypto assets at a professional level may also face income tax and national insurance obligations.
Besides, HMRC continues to encourage investors to maintain accurate transaction records and submit annual self-assessment returns. Failure to report gains could lead to penalties or further investigations as enforcement actions intensify.
Wider Implications for the UK Crypto Market
The surge in HMRC’s enforcement actions highlights the government’s growing focus on tax compliance within the digital asset market. Moreover, as cryptocurrency adoption rises, investors are urged to understand their tax responsibilities to avoid future disputes.
Consequently, the combination of enhanced data-sharing agreements and expanding oversight signals a tougher stance on crypto tax evasion. The UK’s digital asset market, now one of the largest in Europe, faces a new phase of regulatory enforcement aimed at ensuring transparency and accountability.
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