The UK tax authority has stepped up its scrutiny of cryptocurrency investors, doubling the number of warning letters sent to those suspected of not reporting or evading taxes on digital asset gains.
HMRC issued nearly 65,000 letters in the 2024-25 tax year, up from 27,700 the previous year, the Financial Times reports. I mentioned on Friday, citing data obtained under the Freedom of Information Act.
The letters, known as “alert letters,” are designed to urge investors to voluntarily correct their tax returns before formal investigations begin.
The sharp increase reflects HMRC’s increasing focus on cryptocurrency-related tax compliance. Over the past four years, the agency has sent more than 100,000 such letters, with activity accelerating as crypto adoption and asset prices rise.
Related to: How to File Crypto Taxes in 2025 (US, UK, Germany Guide)
7 million adults in the UK own cryptocurrencies
Financial Conduct Authority Estimates That seven million UK adults now own cryptocurrencies, up from around 10% (5 million) in 2022 or 4.4% (2.2 million) in 2021, shows growing interest.
“The tax rules surrounding cryptocurrencies are very complex, and there are now a large number of people trading cryptocurrencies who don’t understand that even if they move from one currency to another, it triggers capital gains tax,” Neela Chauhan, partner at UHY Hacker Young, who submitted the FOI request, told the Financial Times.
HMRC’s market visibility has improved significantly. The agency now receives transaction data directly from major cryptocurrency exchanges and will gain automatic access to global exchange data from 2026 under the Crypto Asset Reporting Framework (CARF) of the Organization for Economic Co-operation and Development (OECD).
Related to: A New York State Senator is proposing a tax on the use of cryptocurrency mining energy
US lawmakers are considering tax breaks for cryptocurrencies
US Senators are exploring updates to cryptocurrency tax policy, including exempting small transactions from taxes and clarifying how staking rewards are handled.
During a Senate Finance Committee hearing earlier this month, lawmakers discussed whether daily cryptocurrency payments should trigger a capital gains tax and how to fairly classify income generated from staking services. Coinbase Vice President of Taxation Lawrence Zlatkin urged Congress to adopt a minimum exemption for cryptocurrency transactions of less than $300.
Meanwhile, South Korea’s National Tax Service (NTS) has also intensified its campaign against cryptocurrency tax evasion, warning that even assets stored in cold wallets will be seized if they are linked to unpaid taxes.
magazine: Back to Ethereum – How Synthetics, Ronin and Silo saw the light
The post UK Tax Authority Ups Crypto Warning Letters in Crackdown on Unpaid Gains first appeared on Investorempires.com.
