The UK tax authority HM Revenue & Customs (HMRC) has stepped up enforcement in the crypto sector, sending approximately 65,000 “nudge letters” in the 2024-25 tax year to investors suspected of under-reporting or evading taxes on digital assets — more than double the number sent the previous year.
These letters are part of HMRC’s broader strategy to nudge compliant behaviour, urging recipients to review their tax filings and settle any outstanding liabilities before a formal investigation is launched.
Why HMRC Is Turning the Up the Pressure
HMRC obtained the data through a Freedom of Information request submitted by the accounting firm UHY Hacker Young. According to the figures:
• In 2023-24, HMRC sent around 27,700 letters.
• In 2024-25, the figure jumped to around 64,982 letters.
HMRC is also making use of direct data from crypto exchanges to identify discrepancies in investor tax filings.
New Global Data-Sharing Framework and Its Impact
From January 2026, HMRC will get broader access to worldwide transaction data under the Crypto‑Assets Reporting Framework (CARF), a global initiative adopted by around 70 jurisdictions, including many OECD members.
Under CARF, crypto exchanges will be required to report user and transaction details to national tax authorities, with the first submission deadline slated for 31 May 2027.
What Crypto Investors in the UK Need to Know
In the UK, most crypto assets are treated as investments. Any sale, swap or purchase involving crypto is deemed a “disposal” and is subject to Capital Gains Tax (CGT). Earning crypto via mining, staking, airdrops or through employment is treated as income and taxed separately.
Recent changes to the CGT regime include increased rates: 18% for basic-rate taxpayers and 24% for higher-rate taxpayers for disposals made after 30 October 2024.
Tax professionals caution that even common actions—like exchanging one cryptocurrency for another, staking rewards or moving assets between wallets—can trigger taxable events.
Rising Crypto Adoption Meets Increased Scrutiny
The crackdown coincides with significant growth in UK crypto ownership: the Financial Conduct Authority (FCA) estimates about 7 million UK adults now hold cryptocurrency, up from five million in 2022 and just over two million in 2021.
As the crypto-market matures and enters mainstream finance, authorities globally are ramping up compliance efforts. HMRC’s campaign mirrors similar moves in other jurisdictions.
What This Means for Investors and Taxpayers
• Anyone receiving an HMRC “nudge letter” should treat it seriously: ignoring it may lead to formal investigations, penalties and interest.
• If you hold crypto assets, even if you haven’t received a letter, it’s wise to review your tax position, keep detailed records and get professional advice.
• With CARF coming in, cross-border tracking of crypto transactions will increase — hiding assets with foreign exchanges or wallets offers less cover than in the past.
• Activities such as trading, exchanging, staking or even gifting crypto may create tax events — under-standing your obligations early can minimise risks.
