HM Revenue & Customs (HMRC) has stepped up its scrutiny of the crypto sector, sending 65,000 “nudge letters” to investors suspected of under-declaring or evading tax on digital assets, more than double last year’s figure, according to the Financial Times.
The data, obtained through a Freedom of Information Act request from accounting firm UHY Hacker Young, shows a 134% increase in warnings.
These letters are typically sent before formal investigations begin, urging recipients to review their records and settle outstanding debts.
Neela Chauhan, partner at UHY, said HMRC leveraged data provided directly by crypto exchanges to identify potential cases of tax avoidance.
The UK’s campaign reflects global efforts. In India, tax authorities are reportedly pursuing more than 400 suspected tax evaders using data shared by Binance.
Both examples show how governments are gaining greater visibility into crypto activity through international data sharing agreements.
From January 2026, HMRC will benefit from even greater access to information through the Crypto-Assets Reporting Framework (CARF), a global initiative adopted by around 70 jurisdictions, including members of the OECD.
Under CARF, exchanges will be required to report user and transaction data to national tax authorities, with the first submissions expected by May 31, 2027.
UK tax rules classify most crypto assets as investments. Any sale, exchange or purchase made with cryptocurrencies counts as a transfer subject to capital gains tax (CGT).
Earning crypto through mining, staking, airdrops, or employment is treated as income, taxed separately.
Recent adjustments have increased CGT rates to 18% for the basic rate and 24% for higher rate taxpayers for disposals made after October 30, 2024.
At the same time, the UK financial regulator lifted its four-year ban on crypto-based exchange-traded notes (ETNs), allowing asset managers to list products on the London Stock Exchange.
Market analysts at IG Group expect the move to boost domestic crypto activity by up to 20%, reflecting growing mainstream acceptance despite increased tax enforcement.
UK to appoint ‘digital markets champion’ to oversee blockchain transition in financial sector
As reported, the UK government is considering appointing a “digital markets champion” to accelerate the country’s transition to blockchain-based financial infrastructure, according to remarks from Economic Secretary to the Treasury Lucy Rigby.
The new head will coordinate private sector efforts to tokenize wholesale financial instruments and ensure that innovation complies with the country’s regulatory framework.
Speaking at the Digital Assets Week conference in London, Rigby also announced the creation of the Dematerialisation Market Action Taskforce, a new body focused on replacing paper share certificates with digital records to improve market efficiency.
The initiative is part of the UK’s Wholesale Financial Markets Digital Strategy, which outlines plans to issue blockchain-based sovereign debt, known as “digital gilts” under the DIGIT framework.
UK tax authority sends 65,000 crypto ‘nudge letters’ to suspected tax evaders appeared first on Cryptonews.
