HMRC has sent 65,000 letters to crypto owners in a year, stepping up its crackdown on tax evasion as the market grows.
HMRC has doubled the number of letters to crypto investors as part of its tax crackdown
The British tax authority HMRC has doubled the number of warnings to cryptocurrency owners, increasing its control over the declaration of profits from digital assets. According to the Financial Times, in the 2024-2025 financial year, almost 65,000 “nudge letters” were sent – compared to 27,700 a year earlier.
Such letters are not direct accusations of violating the law, but serve as a warning: if the investor does not correct the errors in the reporting on his own, HMRC may open a formal investigation. Since 2020, the number of such appeals has exceeded 100,000, and the trend is intensifying along with the growth of the cryptocurrency market.
HMRC shifts focus to cryptocrime
HMRC is increasingly using data from crypto exchanges, gaining direct access to citizens’ transaction reports.
From 2026, the agency will have automatic access to a global data exchange under the OECD Crypto-Assets Reporting Framework (CARF). This will allow it to identify undisclosed assets and profits, even if they are held on foreign platforms.
“The tax rules for crypto remain complex, and many traders do not even realise that exchanging one coin for another can create capital gains tax liabilities,” said Neela Chauhan, a partner at accounting firm UHY Hacker Young, who initiated the request for statistics.
Cryptocurrency is becoming a mainstream asset in Britain
According to the Financial Conduct Authority (FCA), seven million Britons now own crypto assets – around 13% of the adult population. In comparison, in 2021, this figure was only 4.4%.
The expansion of the investor base increases the risk of misdeclaration. HMRC is already warning that even small trading volumes are subject to tax if they generate profits.
Global tax front: US and South Korea
In parallel, the US Senate is discussing new tax policy for cryptocurrencies. Among the proposals are exemption of small transactions up to $300 from taxation and a clear definition of the status of staking income.
Lawrence Zlatkin, Coinbase’s vice president of tax, called for the adoption of a “de minimis exemption” for everyday crypto payments to reduce the administrative burden on users.
In South Korea, the tax agency NTS went further: it warned that even “cold wallets” will not save from confiscation if the assets are related to unpaid taxes.
Context
HMRC’s increased scrutiny is part of a global trend as governments seek to establish transparent rules for taxing cryptocurrencies without stifling innovation.
For Britain, it is also a test of whether the country can find a balance between fiscal discipline and London’s competitiveness as Europe’s crypto-finance hub.
Related: Crypto Taxes & Reporting: What Every Investor Should Know Before Year-End
