UK Doubles Crypto Warning Letters Amid Crackdown on Unreported Gains
UK escalates crypto crackdown with 65,000 tax warning letters
The UK government is turning up the heat on crypto investors, as the tax authority has more than doubled its warnings to those suspected of underreporting their digital asset profits. HM Revenue & Customs (HMRC) sent nearly 65,000 “nudge letters” during the 2024–25 tax year, a sharp rise from 27,700 the previous year, according to the Financial Times.
These letters serve as early warnings, giving investors a chance to amend their filings before facing official investigations or fines. Over the past four years, HMRC has issued more than 100,000 such notices, signaling its growing determination to close tax gaps in the booming crypto sector.
The surge comes as crypto ownership continues to soar across the UK. The Financial Conduct Authority estimates that seven million Britons now hold digital assets, up from five million in 2022 and just 2.2 million in 2021.
Experts warn that many investors still misunderstand the tax implications of trading or swapping crypto. “Even moving from one coin to another can trigger capital gains tax,” said Neela Chauhan, a partner at UHY Hacker Young, which obtained the data under a Freedom of Information request.
HMRC’s monitoring capabilities have also expanded significantly. It now receives transaction data directly from major exchanges and will gain global access to crypto exchange information from 2026 under the OECD’s new Crypto-Assets Reporting Framework (CARF).
The UK’s tightening stance mirrors similar moves abroad. In the US, lawmakers are considering exemptions for small crypto payments and clearer taxation rules for staking rewards. Meanwhile, South Korea’s tax authority has warned it will seize unpaid crypto assets — even those held in cold wallets — as part of its aggressive enforcement measures.
