UK Sends 65,000 Letters to Suspected Crypto Tax Evaders
UK Tax Authority Targets Underreported Crypto Gains
HM Revenue & Customs (HMRC) has intensified its oversight of cryptocurrency investors, sending almost 65,000 warning letters in the 2024–25 tax year—more than double the 27,700 issued the previous year, according to figures obtained by the Financial Times under the Freedom of Information Act.
The notices, often called “nudge letters,” encourage taxpayers to correct filings voluntarily before formal investigations begin. Over the past four years, HMRC has sent more than 100,000 such letters, part of a sustained effort to bring digital asset profits under tighter tax compliance.
The escalation reflects growing concern within the UK Treasury over unreported crypto transactions as prices and retail participation have surged. Industry analysts say many investors remain unaware that converting between tokens or moving assets between platforms can trigger capital gains tax liabilities.
Investor Takeaway
Seven Million Britons Hold Crypto
The Financial Conduct Authority estimates that around seven million UK adults—roughly 13% of the population—now hold cryptocurrency, up from about 10% in 2022 and 4% in 2021. The rapid growth has made crypto one of the quickest-expanding asset classes among retail investors in Britain.
“The tax rules surrounding crypto are quite complex, and there’s now a volume of people who are trading and not understanding that even moving from one coin to another triggers capital gains tax,” said Neela Chauhan, a partner at accounting firm UHY Hacker Young, which filed the FOI request. Chauhan said the increase in letters shows HMRC’s willingness to act ahead of the global data-sharing rules that take effect in 2026.
Global Data-Sharing to Tighten Enforcement
HMRC’s visibility into crypto transactions has improved sharply. The agency already receives transaction data directly from major platforms operating in the UK and will gain automatic access to international platform data in 2026 under the Organisation for Economic Co-operation and Development (OECD)’s Crypto-Assets Reporting Framework (CARF).
The framework will enable tax authorities across jurisdictions to platform information on individuals and entities , mirroring existing systems for bank accounts and investment income. For British taxpayers, this means that overseas platform activity will soon be as transparent to HMRC as domestic trading.
Crypto tax advisers say the growing data pipeline leaves little room for concealment. “The combination of CARF and HMRC’s own data collection powers will make it very hard for anyone to hide crypto gains,” one London-based tax specialist said.
Investor Takeaway
Broader International Push
Other countries are also intensifying crypto tax collection. In the United States, lawmakers are weighing proposals to exempt small digital transactions from taxation and clarify the treatment of staking rewards. During a Senate Finance Committee hearing earlier this month, Coinbase executive Lawrence Zlatkin called for a de minimis exemption for payments under $300.
Meanwhile, South Korea’s National Tax Service has warned that even crypto assets stored in cold wallets may be seized if linked to unpaid taxes. The agency has already begun tracking digital holdings as part of a broader effort to clamp down on offshore evasion.
Tax authorities around the world are converging on a similar message: digital assets are no longer an enforcement blind spot. For UK investors, the warning letters mark the begin of a more coordinated and data-driven era of compliance.
