UK's HMRC targets crypto investors in major tax crackdown

Source Cryptopolitan

The UK tax authority HM Revenue & Customs (HMRC) increased the number of warning letters sent to its crypto investors by more than double the previous figure last year. This demonstrated the application of stronger efforts to address the unpaid capital tax on digital assets.

Sources familiar with the situation highlight that around 65,000 letters from the tax authority were sent to individuals who might owe taxes on their cryptocurrency holdings between the 2024 and 2025 tax years. This new number indicated a rise from the previous 27,700 letters sent in 2023, according to data released under the Freedom of Information Act.

This type of letter, issued by HMRC to those considered avoiding or evading taxes, is called “nudge letters.” They aim at encouraging people to pay up any owed taxes before the imposition of a formal investigation.

Chauhan calls on crypto investors to be responsible in paying their taxes

The FOI shared a report illustrating that in the last four years, HMRC sent about 8,329 letters to crypto investors, from 2021 to 2022. As of 2022 to 2023, there were no letters sent. Afterwards, from 2023 to 2024, there were around 27,713 letters sent. This figure was greatly increased to 64,982 from 2024 to 2025.

From this report, Tax advisors acknowledged that the total number of unpaid taxes could be significantly large since several individuals might have ignored their responsibility to pay their taxes when trading cryptocurrencies. 

Regarding crypto asset holding in the UK, the Financial Conduct Authority (FCA) revealed that about 7 million adults in the country hold around £12.9 billion in crypto assets. According to their research, this reflects an increase of  £5.1 billion from £7.8 billion held in 2022. The agency also highlighted that Bitcoin’s prices have surged by 315% over two years, leading up to October 6, 2025. 

Neela Chauhan, a partner at the accounting firm UHY Hacker Young, which requested information through FOI, weighed in on the topic of discussion. Chauhan pointed out that the regulations put forth for taxes on cryptocurrencies are very complicated. 

She also highlighted that many individuals trading in crypto are unaware that shifting from one coin to another can trigger capital gains tax, further pointing out the extent to which some crypto traders disagree with the idea of paying taxes on their profits.

With these facts laid out, Chauhan cautioned crypto investors that HMRC has adopted a new approach of gathering data directly from numerous crypto exchanges. This data helps them find out if people are adhering to the tax laws set.

“As HMRC gets more data, it will likely intensify its efforts to enforce tax regulations on crypto investors. Therefore, those who have not reported their capital gains will find it harder to escape the attention of the tax authority,” she added.

HMRC intensifies its efforts to enforce tax regulations on crypto investors 

Reports with knowledge on the situation have highlighted that as of 2026, HMRC will automatically gain access to data from various crypto exchanges as part of an OECD-led program known as the Crypto-Assets Reporting Framework. 

Under this program, anyone who engages in the sales or disposal of crypto assets has to pay capital gains tax on profits over their annual allowance (currently £3,000).

However, if at any point HMRC considers buying and selling crypto assets as “trading,” individuals will be liable to pay income tax and national insurance. Therefore, individuals need to keep records of their transactions and report any taxes owed by filing an annual self-assessment return.

On related development, an early crypto investor dubbed the “Bitcoin Jesus” has agreed to pay up to $49.9 million to resolve charges he evaded tens of millions of dollars in taxes, the U.S. Department of Justice said in a court filing earlier this week.
As earlier reported by Cryptopolitan, Roger Ver sealed a deferred prosecution agreement, opening a clean slate on mail fraud and tax evasion charges in federal court in Los Angeles after publicly campaigning earlier this year for President Donald Trump to “help to end this lawfare.”

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