The UK’s tax agency, HM Revenue & Customs (HMRC), has escalated its efforts to ensure crypto investors pay their fair share of taxes, doubling the number of warning letters sent to suspected tax evaders.
According to data obtained by the Financial Times through a Freedom of Information request, HMRC issued nearly 65,000 “nudge letters” during the 2024–25 tax year.
That figure is more than double the 27,700 letters sent in the previous year and reflects a major increase in enforcement activity as cryptocurrency adoption grows.
These letters encourage investors to voluntarily correct potential mistakes or omissions in their tax filings before the agency initiates formal investigations.
Four-Year Push to Improve Crypto Compliance
HMRC’s focus on crypto tax compliance has expanded significantly over the past four years.
In total, more than 100,000 letters have now been sent to UK crypto holders, with the pace accelerating alongside rising crypto prices and broader public participation in digital assets.
The agency’s increased efforts signal that it is taking a much tougher stance on undeclared crypto gains, as it gains new access to transaction data from global platforms.
Millions of Brits Now Own Crypto
Recent estimates from the Financial Conduct Authority (FCA) suggest that roughly seven million UK adults now hold cryptocurrency — a notable jump from five million in 2022 and just over two million in 2021.
“The tax rules surrounding crypto are quite complex and there’s now a volume of people who are trading in crypto and not understanding that even if they move from one coin to another it triggers capital gains tax,” said Neela Chauhan, a partner at UHY Hacker Young, which filed the FOI request.
HMRC’s visibility has improved considerably as it now receives transaction data directly from major exchanges, according to a report by iBusiness.News.
From 2026, the UK will also benefit from automatic cross-border information sharing under the Organisation for Economic Co-operation and Development’s (OECD) new Crypto-Assets Reporting Framework (CARF), which will allow tax authorities to track global crypto holdings.
Global Regulators Step Up Crypto Tax Enforcement
Tax agencies worldwide are also tightening their grip on crypto investors.
In the United States, lawmakers have been debating whether small crypto transactions should be exempt from capital gains taxes.
During a recent Senate Finance Committee hearing, policymakers discussed introducing a “de minimis” threshold that would exclude everyday payments under $300 from taxation.
Coinbase’s vice president of tax, Lawrence Zlatkin, urged Congress to adopt the measure and to provide clearer rules for the taxation of staking rewards.
In Asia, South Korea’s National Tax Service (NTS) has also toughened its stance, warning that even cryptocurrencies stored in cold wallets could be seized if linked to unpaid tax liabilities.
As governments adapt to the expanding crypto economy, experts say that regulatory clarity and compliance systems will become increasingly important for both investors and exchanges.